Modern Land Issues Additional USD150million, 6.875% Green Bonds

HONG KONG — A leading real estate developer of green technological properties – Modern Land (China) Co Ltd (“Modern Land,” the “Company,” together with its subsidiaries, the “Group,” HKSE stock code: 1107.HK) — is pleased to announce that on 29 December (New York time), the Company successfully issued additional USD150,000,000 senior notes due 2019, with an interest rate of 6.875% per annum.

This initiative is another prominent step after the Company’s green bond issuance in October this year, with an ultimate goal to boost the innovation of green financing and to consolidate the Company’s leadership position in green finance sector.

Modern Land announced that the Company, the Subsidiary Guarantors, Guotai Junan and Zhongtai International entered into the Purchase Agreement in connection with the Additional Notes Issue with an aggregate principal amount of USD150,000,000 and an interest rate of 6.875% per annum which will mature on 20 October 2019.

For this Additional Notes Issue, Guotai Junan is appointed as the sole global coordinator, while Guotai Junan and Zhongtai International are appointed as the joint lead managers and joint bookrunners. The offer price of the Additional Notes will be 98.193% of the principal amount plus accrued interest from (and including) 20 October 2016 to (but excluding) 7 January 2017 December 2016.

The net proceeds of the Additional Notes Issue will amount to approximately USD148,100,000 and the Company intends to use the proceeds to refinance certain existing indebtedness.

On 14 October this year, Modern Land has already successfully issued USD350,000,000 green bonds due 2019 bearing interest at the rate of 6.875% per annum, which makes it the first Chinese property developers listed in Hong Kong to issue such bonds.

The notes are issued as green bonds to fund existing projects of the Group and businesses with environmental benefits in alignment with the Green Bond Principles. Moreover, the interest rate of 6.875% achieved record low among those offshore notes issued by the Company.

Mr. Zhang Peng, the Executive Director and President of Modern Land, said, “As a property developer focusing on the development of green, energy-saving and ecofriendly residences in the PRC, Modern Land has unprecedentedly captured the opportunities arisen from green finance since its green bond issuance this October. The additional green bond issuance this time, which also bears the record low interest rate for financing, indicates the Group’s consistent determination to explore innovative financing channels and to consolidate its leadership position in green finance industry. Witnessing the overloaded pressure among Chinese real estate developers in 2016, Modern Land not only developed its existing green real estate sector, but also tapped into green finance sector to pursue additional profit opportunities with adherence to its accurate analysis of current situation and powerful innovation gene. Since favorable National policies are paving ways for green industry development nowadays, we anticipate that there will be abundant green asset flooding into capital markets in 2017. There is no doubt that Modern Land’s green bond issuance can serve as an inspiring and diversified example in the green finance industry in PRC.”

With the environment problem arousing worldwide attention, capital markets have gradually embraced an overwhelming trend of green finance. China has rolled out Public-Private-Partnership (“PP”) model, as part of the attempts to invite private investments in green industry. Green finance market also became one of the heated topics for the first time during Hangzhou G20 Submit in September this year.

Despite being a “blue ocean” market in Hong Kong as well as in Mainland China, green bond displays notable growth momentum. In January 2016, Shanghai Pudong Development Bank issued China’s first green bonds. In July, Link Reit issued the first corporate green bonds in Hong Kong and got oversubscribed by 4 times, according to media reports. These cases vividly reflect the prominent attention of green bond captured in capital markets.

Modern Land’s green bonds in October were also highly acknowledged by global market. CICERO (Center for International Climate and Environmental Research – Oslo), an authoritative organization in green industry, provided a distinguished Second Opinion report of Modern Land’s green bonds according to which the Company has achieved significantly in energy saving and green architecture fields. Fitch Ratings, an international credit ratings institution, also assigned Modern Land’s green bonds a final rating of ‘B+’.

In fact, Modern Land has given outstanding financial performances and consistently brought satisfactory investment returns to its profound shareholders. For the first half year of 2016, the Group recorded a revenue of approximately RMB4,271 million, representing a significant year-on-year growth of 118.6%.

The profit for the period attributable to the owners of the Company recorded a year-on-year increase of 75.8% to approximately RMB500 million. These results showed a high growth rate in a sustainable development status with satisfactory turnover.

Moreover, Modern Land introduced Great Wall Pan Asia International Investment Company Limited, a subsidiary of China Great Wall Asset Management Corporation as its strategic shareholder this September and also introduced China Cinda (HK) Asset Management Co., Limited, a wholly-owned subsidiary of China Cinda Asset Management Co., Ltd. as its second largest shareholder this November.

Both Great Wall Asset and China Cinda are the Top Four Finance Asset Management Companies in China. These initiatives show another evident of Modern Land’s robust growth potential which has gained popularity among powerful institutional investors. –