China Corporate and Investment Banking Awards 2019: Citic Securities
Best Securities House for Domestic Equity Capital Markets
Citic Securities maintained its market leading position in domestic equity capital markets underwriting during our awards period. Between June 1, 2018 and May 31, 2019, Citic was involved in 57 ECM transactions with a volume of Rmb217 billion ($31 billion) – 64% higher than the second-place name, according to Wind.
These included 15 IPOs and 13 A-share follow-on offerings, three preference shares, 10 convertible bonds and five exchangeable bonds.
It was the sponsor for Ningxia Baofeng Energy Group’s listing on the Shanghai Stock Exchange, the largest domestic IPO for a private company in China. Citic helped Baofeng, which was listed on May 16, to complete its deal only 27 days after receiving approval from the China Securities Regulatory Commission.
For a private company in the relatively less-developed province of Ningxia, the 400-plus times oversubscription rate was an outcome that marked a milestone in northwestern China.
Despite an almost 30% volume decline in the overall follow-on market in 2018 due to tightened regulations, Citic still completed 13 A-share non-public follow-on offerings during our awards period, including Agricultural Bank of China’s Rmb1 billion transaction in July last year, the largest-ever refinancing exercise in the A-share market.
The securities house was also an indisputable leader in more complicated products such as convertible and exchangeable bonds, in both number of deals and volume terms. It was a lead underwriter and the sole bookrunner for China Three Gorges’ Rmb20 billion exchangeable green bonds. Priced in April, the five-year green EBs were the first of their kind in China, and remain the largest green bond in the domestic market. The 0.5% coupon was also a record low for EBs.
Citic also led the Rmb40 billion A-share convertible bonds from its sister company China Citic Bank, the largest CB the market had seen since 2011. The choice of issuing the bonds in the conducive March window ensured a lower cost of capital for the Chinese joint stock commercial bank.
Although existing shareholders such as Citic Group were given priority in the bonds’ subscription, institutional investors still put in an unprecedented Rmb57 trillion of orders. The allocation to retail investors, on the other hand, was only 0.018%.
Citic was the most active of the few Chinese firms involved in the issuance of preference shares, handling three deals for the likes of Bank of Ningbo and Bank of Guiyang during our awards period.