One of China’s largest private education groups, Hope Education Group Company (HEG), debuted in the Thai baht bond market – thanks to a guarantee extended by the Credit Guarantee and Investment Facility (CGIF), a trust fund of the Asian Development Bank (ADB).
The guaranteed bond, announced on September 28, is for three years amounting to 1.3 billion baht (US$35.50 million). The unsubordinated bond was placed with domestic institutional investors at a coupon rate of 4.12% per annum. With CGIF’s AAA-rated guarantee, HEG was able to diversify its funding sources and tap into long-term inter-Asean liquidity to supplement its cross-border capital investments.
The bond was issued under the Asean+3 multi-currency bond issuance framework, a policy initiative under the Asian Bond Markets Initiative (ABMI) to standardize the bond and note issuance processes and with the goal of strengthening bond market linkages among the Asean+3 countries. Standard Chartered Bank (Thai) acted as the lead arranger for the issuance.
CGIF CEO Hongwei Wang says the issuance will certainly benefit HEG in diversifying its funding sources to support its sustainable growth. “The transaction showcases our commitment in promoting debut issuers and cross-border issuances in the Asean+3 region,” he adds.
With 280,453 students as of February 28 2023, HEG owns and operates 23 higher education schools and two technical colleges, including 10 schools in Southwest China, four schools in East China, three schools in North China, one school in South China, one school in Central China, three schools in Northwest China and three schools overseas. The overseas universities are INTI International University in Malaysia, Metharath University, which is formerly known as Shinawatra University, in Thailand, and Wekerle Business School of Hungary.
CGIF commenced its guarantee operations on May 1 2012 and seeks to provide credit enhancements, mainly in local currencies, issued by credit-worthy Asean+3-domiciled bond issuers.
In April this year, CGIF guaranteed the second CNH bond issuance of another Chinese issuer, China Education Group Holdings, amounting to 500 million yuan (US$68.50 million) for three years. The first issuance, also amounting to CNH 500 million, was priced in March 2022 and represented the Asean+3’s first international bond by an issuer from the higher education sector.