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Treasury & Capital Markets
Everbright Water issues US$275.89 million ABS
Proceeds to revitalize existing assets, enhance financing channels, capital efficiency
The Asset 19 Apr 2024

Environmental protection company China Everbright Water has completed the issuance of asset-backed securities (ABS) to qualified institutional investors in mainland China, with a principal amount of 2 billion yuan (US$275.89 million) and a subscription rate of 3.04 times.

The proceeds from the ABS issuance will be used to repay loans borrowed by the company and its subsidiaries, and replenish working capital.

In relation to the issuance, the company’s wholly-owned subsidiary Everbright Water (Shenzhen) is the original beneficiary, and the underlying assets are the rights of Everbright Water’s subsidiary to receive waste water treatment service fees in connection with three waste water treatment projects located in Shandong Province.

The issued ABS comprise preference and subordinate ABS. The preference ABS have an issuance size of 1.9 billion yuan and are classified into seven classes, with maturity periods ranging from approximately one to nine years.

The composite interest rate is 2.67% per annum, with an “AAAsf” credit rating evaluated by Shanghai Brilliance Credit Rating & Investors Service. The subordinate ABS have an issuance size of 100 million yuan and are issued to Everbright Water (Shenzhen). Orient Minerva Asset Management acts as the manager of the ABS scheme.

This ABS issuance marks the company’s second foray into this particular type of bond, subsequent to its initial ABS issuance in 2020. This ABS issuance allows it to revitalize existing assets and solidify diverse financing channels, which helps optimize its financing structure, maintain its financial cost at a reasonable level and enhance the efficiency of capital use.

Moving forward, the company, it says, “will remain vigilant in monitoring and exploring various financing channels, and make effective allocation of the proceeds, so as to provide solid financial support for the company’s sustainable development”.

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