Shandong Ruyi closes debut dollar bond offering ahead of US Fed decision on rates

PUBLISHED : Wednesday, 14 December, 2016, 12:42pm
UPDATED : Wednesday, 14 December, 2016, 10:50pm

China’s Shandong Ruyi Technology Group, which bought French fashion company SMCP Group in March this year, issued its debut US dollar bond in the offshore market with coupon rate of 7.5 per cent.

The deal closed ahead of the US Federal Reserve’s expected interest rate rise this week.

Standard Chartered Bank, acting as sole global coordinator and bookrunner, said it successfully priced Shandong Ruyi Technology Group’s US$250 million, 7.5 per cent 3 year senior unsecured fixed rate note on Tuesday. Yield was 17.5 basis points lower to 8.2 per cent from the initial guidance of 8.375 per cent.

Despite a challenging market environment amid political uncertainty and the year end when investors are closing their books, the deal was supported by both international and Chinese institutional investors, making it the lowest rated debut issuer from Greater China in the non property market space, said Li Chao, head of Greater China Syndicate at Standard Chartered Bank.

In March Shandong Ruyi, a northern Chinese textile producer founded in 1972, acquired a controlling stake in SMCP, a French luxury products marketer which owns brands like Sandro, Maje and Claudie Pierlot, for £1.3 billion including debt.

“This would be a significant step for Shandong Ruyi Group in our continued endeavour to become a leader in the fully-integrated textiles and fashion business both in China and globally,” Qiu Yafu, chairman of Shandong Ruyi Group, said at the time.

Ruyi, with total assets of about 24 billion yuan as of 2015, has over 20 subsidiaries, including two listed units in China and Japan. International brands such as Armani, Hugo Boss and Zegna are among its clients.

In 2010, it paid US$44 million for 41 per cent stake in Tokyo-listed Japanese apparel giant Renown, becoming its largest shareholder.