DEAL: China Zheshang Bank’s $2.17 billion AT1 debut

Author: Brian Yap | Published: 26 May 2017

China Zheshang Bank has become the first PRC lender to issue additional tier 1 (AT1) preference shares in US dollar, raising $2.17 billion on a 5.45% coupon.      

Discrepancies between the Hong Kong Stock Exchange’s (HKEx) legal definition of preference shares and the market classification of them led to a month-long process of obtaining multiple waivers from the HKEx.

China Zheshang Bank broke new ground with its AT1 issuance

“There was quite an intensive process that we needed to go through with the HKEx, but because of the ways the rules are written, we needed to obtain over 40 waivers in order to fit what we had,” said Terence Lau, partner at Linklaters in Hong Kong. One of the key waivers applied was one for allowing preference shares to be sold only to professionals and not cleared through the Central Clearing and Settlement...