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Allens advises Hunan Valin on US$355 million issuance

15 November 2016

Allens has advised Hunan Valin Iron and Steel Group Co. Ltd (Hunan Valin) on the issuance of US$355 million zero coupon bonds due 2021, exchangeable for approximately 65 million shares in Fortescue Metals Group Ltd.

The issuance is one of the first exchangeable bond transactions to feature the shares of an Australian ASX-listed company.

The bonds will be listed on the Singapore Stock Exchange. The issuer is a wholly owned subsidiary of Hunan Valin and is incorporated in Singapore.

Hunan Valin is one of the top 10 steel manufacturers in China by production volume and is the largest state-owned enterprise in the province of Hunan in China.

It intends to use the net proceeds of issuance of the exchangeable bonds for capital and general corporate purposes.

Allens advised on the Australian law aspects of the transaction, including the security interest granted by the issuer over the Fortescue shares in favour of the bondholders.

Deutsche Bank AG acted as the sole lead manager and bookrunner for the deal.

The Allens team was led by Banking & Finance Partner James Darcy, Corporate Partner Julian Donnan, and Tax Partner Martin Fry.

'We are pleased to have assisted Hunan Valin on this ground breaking deal in the Australian market,' James Darcy said.

'There have been few exchangeable deals in the Australian market recently, as opposed to convertibles, so it was a great opportunity to be involved in a deal of this complexity, combining both debt and equity skill-sets,' Julian Donnan said.

Allens legal team James Darcy (Partner, Banking & Finance), Julian Donnan (Partner, Corporate), Martin Fry (Partner, Tax), Thomas McAuliffe (Senior Tax Counsel), Katrina Huang (Senior Associate, Banking & Finance), Addison Ma (Senior Associate, Corporate), Anthony Tridgell (Lawyer, Banking & Finance)

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Notes for editors.

Allens is a commercial law firm working throughout Australia and Asia. Through its integrated alliance with Linklaters it provides clients access to 39 offices in 28 countries around the world.