On 19 August 2026, Shanghai Electric Group Company Limited, through a BVI special purpose vehicle established by its wholly-owned subsidiary Shanghai Electric HongKong Co. Limited, completed a CNY 1.5 billion three-year green Free Trade Zone (FTZ) offshore bond offering (the “Transaction”). The bonds were listed on The Stock Exchange of Hong Kong Limited (“HKEX”) on 20 August 2026. Fangda Partners acted as the issuer’s international counsel and listing agent on HKEX.
This Transaction achieves three groundbreaking milestones:
(1) the first green FTZ offshore bond issued by an offshore enterprise;
(2) the first green FTZ offshore bond listed on HKEX; and
(3) the lowest coupon rate ever for Renminbi-denominated offshore bonds issued by a Shanghai municipal non-financial state-owned enterprise.
In addition, it is the first FTZ offshore bond product to achieve regulatory and institutional integration by utilising the financial infrastructure of the China Central Depository & Clearing Co., Ltd. (“CCDC”) while being simultaneously listed on HKEX.
Under the new regulatory framework introduced in 2025, FTZ offshore bonds are formally designated under the policy principle of “both-ends-offshore” – i.e., the general principle of issuing in offshore markets and being invested in by offshore investors. On the issuance side, eligible issuers include offshore institutions, offshore subsidiaries of domestic corporate entities, and offshore branches of domestic financial institutions; on the investment side, the primary investors are offshore institutions, with support for relevant market participants to conduct investment through Free Trade Accounting Unit (FTU) in accordance with applicable laws.
Prior to this Transaction, FTZ offshore bond issuances had been largely concentrated among offshore branches of domestic financial institutions, with no actual case involving a non financial corporate entity. This Transaction marks the first time that the issuance channel reserved for non financial corporate entities under the new regulatory framework has been successfully developed into a viable and replicable offshore financing solution for an industrial group. The bonds carry a coupon rate of 1.80%, achieving the lowest historical coupon rate for Renminbi-denominated offshore bonds issued by a Shanghai municipal non financial state-owned enterprise, helping the issuer effectively optimise its offshore financing structure and lock in a favourable overall funding cost.
This Transaction was led by Fangda’s Capital Markets partner Annie SHEN. Special thanks go to Tan Peng and Mark Lehmkuhler for their support.