Having the Company Quality Tested by the Market

On December 1, Sinochem International issued publicly the convertible bond under separable transaction (hereinafter called "separable bond"), which pioneered the issuance of company bond without guarantor among listed companies in China.
Different from the separable bond issued or planned to be issued, the most distinctive characteristic of the separable bond of Sinochem International is the issuance without guarantor. It is not only based on the regulation of "Administrative measures on Securities offering by listed companies", which says that the listed companies with net asset no less than RMB1.5 billion Yuan as the audit result of the latest term are eligible to offer convertible bond without providing guarantor, but also based on stable capital structure, strong capital liquidity, and bright prospects and large amount of cash flow of the projects for which the capital is raised. Meanwhile, China Chengxin Credit Management Company rated AAA, the highest credit rating, for the separable bond offered by Sinochem International this time. Under such context, in order to reduce financing cost, Sinochem International innovated spontaneously the offering clause without guarantor.
For a long time, the company bond offered by listed companies in China is with the guarantee from the parent companies. Among non-listed large state-owned companies, only China Three Gorge Engineering & Development Head Company had its year 2006 bond offered without guarantor. The successful offering of separable bond of Sinochem International without guarantor is a good exploration of credit return on company bond offering in China, making company bond the true credit bond, in addition to its fully indication of capital power of Sinochem International paying back interest of the bond with its own cash flow. Meanwhile, the responsibility and role of credit rating agencies is fully showing, which is helpful to the speeding up of market operation of the offering mechanism of company bond.
According to the announcement of the offering, the total offering of convertible bond under separable transaction of Sinochem International is 1.2 billion yuan. The online subscription reached 9.449 billion Yuan while that from offline institutions reached 27.407 billion yuan, with lucky number ratio in lot drawing as low as to 2.63%. Although it is the 3rd separable bond launched in capital market, it had the lowest lucky number ratio (that of for Maanshan Iron & Steel and Panzhihua New Steel & Vanadium is 9.15% and 3.72% respectively), with 38.06 times of over-subscription. Taking into consideration of the 6-year-long bond without guarantor and the 1-year duration of warrant, the bond interest reaches the planning limit of 1.8%. It not only reflects the enthusiasm of the vast numbers of investors to the separable bond of Sinochem International, but also shows their confidence in the performance and growth of the company. The enthusiasm in subscription from numerous institutional investors demonstrates the acknowledgement of pioneered capital operation from the market. Thus, the first re-financing of Sinochem International 6 years after listing is successfully carried out.