CMPort sells Panda bonds to fund Sri Lanka Hambantota port buy

ECONOMYNEXT – China Merchants Port Holdings has raised 500 million renminbi (US$79.5 million) from a three-year ‘Panda’ bond issue to help fund its acquisition of Sri Lanka’s southern port of Hambantota.

The company, known as CMPort, said it issued the “One Belt One Road” corporate bonds at a coupon rate of 5.15% a year for a term of three years to qualified investors.

The announcement, on the Shenzhen Stock Exchange, said the company shall be entitled to adjust the annual coupon rate at the end of the first and second year after the issue of the corporate bonds.

The Panda bonds are Chinese renminbi-denominated bonds and are issued by the Hong-Kong Listed CMPort as part of efforts to help fund its Belt and Road initiative.

Known as OBOR, the initiative aims to build logistics infrastructure to recreate the ancient ‘Silk Route’ trade route linking China with Europe.

In December 2017, Sri Lanka granted a 99-year lease on the port of Hambantota to China Merchants for $1.12 billion, aiming to use the money to settle debt owed to China.

Rating agency S&P put CM Port on negative rating watch after the Sri Lanka deal was announced last year, saying it expects the group’s debt leverage to further deteriorate.
(COLOMBO, February 12, 2018)