Freshfields Bruckhaus Deringer and King & Wood have advised China Oriental Group, one of the leading steel producers in China, on its US$550 million five-year, 8% secured high-yield bond issue.
The proceeds of the offering will be used to fund projects including potential acquisitions of steel mills in China, capital expenditure projects at the group’s current production facilities and potential investments in iron ore assets.
Deutsche Bank was the sole global coordinator and Deutsche Bank and ING were the joint lead managers and bookrunners to the issue.
The Freshfields team was led by Hong Kong managing partner Kay Ian Ng and Hong Kong-based US partners Ken Martin and Calvin Lai. The team included Hong Kong-based lawyers Vicky Ko, Sharon Chen and Zhu Ke and Beijing-based lawyers Chris Carr, James Lam and Yin Can.
Ng, who is also co-chair of the firm’s capital markets practice, said that the debut bond issue was successfully priced and completed. “The strong demand for the bonds in a volatile market is a good indication of investors’ confidence in this well-managed company,” he commented.
Freshfields has advised China Oriental on all its landmark deals over the past seven years, including its US$258 million IPO in 2004, and its successful defence against a hostile takeover offer from Pioneer Metals in 2007.
King & Wood and Freshfields both advised the company on its strategic cooperation with ArcelorMittal in 2007.
The capital markets teams of the two law firms know each other well, having acted alongside each other on several other deals including Zhongsheng’s US$370 million IPO in Hong Kong (as advisers to the issuer), Guangzhou Automobile Corporation’s privatization proposal for Denway Motors (as advisers to the joint sponsors) and China Pacific Insurance’s US$3.1 billion giant IPO in January (as advisers to the issuer).
In the China Oriental deal, Conyers Dill & Pearman acted as counsel in the British Virgin Islands, Davis Polk & Wardwell in the United States and Jun He Law Offices in China.
