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China Everbright Water's 1b yuan first tranche notes issue 2 times subscribed

DUAL-LISTED environmental services group China Everbright Water on Wednesday said the one billion yuan (S$197.1 million) first tranche of its medium-term notes issue was 2.01 times subscribed by institutional investors in the interbank bond market in China.

The notes, which were issued on Monday and Tuesday, have a maturity period of three years and an interest rate of 3.6 per cent.

The mainboard-listed company will use the proceeds to replenish the working capital of its subsidiaries, it said in a bourse filing.

Executive director and chief executive of China Everbright Water An Xuesong said that the first tranche notes issue would help the company "optimise its financing structure and keep its financial costs within a reasonable range".

China Everbright Water will continue to monitor changes in the market environment closely, and issue the remaining tranche(s) "according to capital demands and market conditions", he added.

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Mr An said that the notes issue would further diversify the company's financing channels. Last month, it issued 300 million yuan in asset-backed securities to qualified investors in mainland China. 

The medium-term notes and company have each been given a AAA rating by the Shanghai Brilliance Credit Rating & Investors Service. Bank of China and Guosen Securities will act as underwriters.

In April, China Everbright Water got the green light from China's interbank market regulator to issue three billion yuan worth of medium-term notes. The notes will be valid for two years from April 24, 2020.

In June, it proposed and then cancelled plans to issue a first tranche of 1.2 billion yuan notes, citing "volatile conditions" in the Chinese bond market. It said then that the move was to control financing costs.

The counter was trading at S$0.24 as at 11.49am on Wednesday, after the announcement.

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