Another local Chinese government entity has joined the growing number of local government financing vehicles (LGFV) to access the international debt capital markets when Zhenjiang Transportation Industry Group Company priced on December 5 its inaugural offering amounting to US$140 million.

The Reg S three-year deal was priced at 99.317% with a coupon of 5.25% to offer a yield of 5.50%. This was in line with the final price guidance and 25bp tighter than the initial price guidance of around 5.75%. The deal represented the first local government transportation platform to issue internationally out of Jiangsu province.

In executing the transaction, Zhenjiang Transportation conducted a series of investor meetings in Hong Kong and Singapore on November 28-29. These meetings proved to be helpful in pinpointing the credit differentiation between the handful of other LGFV issuers in Jiangsu province and recently in China.

The support letters from the various government agencies contained within the offering circular, the change of control clause and the interest reserve account requirement also helped to strengthen the creditworthiness of the marketed offering.

Throughout the marketing process, the deal attracted reverse anchor interests from several Chinese bank treasuries, which helped build a strong foundation for the offering.

The order book at the final guidance stood at US$200 million, with 98% of the bonds sold in Asia and 2% in Europe. By type of investors, banks accounted for 57%, fund and asset managers 36% and private banks 7%. The offering carried a rebate to Asian private banks of 25 cents.

Proceeds from the offering will be used for general corporate purposes. Barclays was the sole global coordinator for the transaction as well as a joint bookrunner and lead manager, along with Haitong International, Huarong International Securities, Shenwan Hongyuan Securities (Hong Kong) and Wing Lung Bank. Cantor Fitzgerald (Hong Kong) Capital Markets acted as a joint lead manager.

Zhenjiang Transportation is one of the four financing and investing platforms directly controlled by the Zhenjiang municipal government. It focuses on construction of transportation infrastructure and on developing pilot ecological new zones in Zhenjiang city.