(ATF) Lanzhou Investment (Holdings) Group (LIHG), the largest municipal project investment and state-owned assets management company in Lanzhou City, Gansu Province, has issued bonds in its first private placement.
The company sold 500 million yuan ($70m) of three-year securities at a lower price than the issuer’s similar bonds.
On April 13, LIHG paid the second-phase of a 2020 directional financing debt instrument, a transaction that was jointly underwritten by Bank of China Gansu Branch and Haitong Securities.
It is understood that the issuer is fully funded by the Lanzhou Municipal People’s Government of Gansu Province, according to Peoples Daily newspaper.
LIHG is involved in construction of infrastructure projects in Lanzhou and operates public utilities such as the city’s gas, public transportation, and heating. In northern China heating is provided by the state for a nominal fee to non-rural residents. The group also oversees the production and sales of Chinese patent medicine.
This business is also the first Lanzhou-level platform bond underwritten by Bank of China’s Gansu Branch.
The Bank of China Gansu Branch helped in the creation of the business, brought the lowest cost of debt issuance to the industry, optimised the financing chain and financing time, and provided financial support for key projects such as infrastructure, municipal administration, and water diversion, according to state media.