30 Dec 2021
Everbright Environment Issues a Carbon Neutrality bond, focusing on Carbon Neutrality.
30 December 2021, Hong Kong – Everbright Environment Protection China Limited (“EEP China”) is a wholly owned subsidiary of China Everbright Environment Group Limited (“Everbright Environment”) (SEHK 257). It recently closed the issue of Everbright Environmental Protection China Limited Series 1 Green Private Placement Assetbacked Notes (Carbon Neutrality Bond), for the year 2021 (“Carbon Neutrality ABN Series 1”) The Carbon Neutrality ABN Series 1 was fully subscribed for by qualified Institutional Investors. With a total issue size of RMB672 Million and a maturity period that lasts 3 years, It is China’s first carbon neutrality linked asset-backed note that uses receivables relating the national subsidies for renewable power prices (“National Subsidies”) to municipal biomass power generation projects as the under assets. The ABN issuance marks also the debut of EEP China quality assets in the domestic capital markets.
EEP China and its affiliates will use the proceeds from the Carbon Neutrality BN Series 1 issuance to replenish the working capital, repay debts to financial institutions, and/or for any other purposes that are consistent with applicable laws and regulations and relevant national industrial policies. The Carbon Neutrality ABN Series 1, which includes preferential ABN and subordinated ABN, consists of two parts. The preferential ABN is approximately RMB645 millions in size, has a maturity rate at 3.52% and a subscription fee of 2.85 times. It has an “AAA” credit rating by Golden Credit Rating International Co. Ltd. The subordinated ABN is approximately RMB27 millions in size. Everbright Securities Company Limited is lead underwriter of the Carbon Neutrality ABN Series 1 issue.
EEP China was approved in December 2021 by the National Association of Financial Market Institutional Investors of the People’s Republic of China (“PRC”) for the issuing of RMB-denominated asset backed notes in single or multiple tranches of institutional investors in the national interbank bond market of China with a total registered issue of not exceeding RMB2billion.
The Carbon Neutrality ABN Series 1 issue shows Everbright Environment’s proactive responses to China’s “Carbon Peaking” and “Carbon Neutrality”, (“Two Carbons”) strategic objectives. Everbright Environment is actively exploring the topic of carbon reduction as a response to the Two Carbons strategy goals. The Company has improved the carbon emission model based upon domestic conditions and received international recognition. It also participates in a pilot program to monitor greenhouse gas emissions at the site. This is a solid foundation for the country’s accurate carbon emission calculation for the treatment sector. The Carbon-Neutral Technology Research and Development Center was established by the Ministry of Ecology and Environment of the PRC. It has also been conducting Two Carbons-linked technology researches such as equipment related to carbon capture.
The Carbon Neutrality ABN Series 1 issue reflects Everbright Environment’s enrichment of asset securitisation of receivables relating the National Subsidies. This was done in response to China Everbright Greentech Limited (SEHK 1257), a subsidiary, completing the 2021 issue of asset-backed note that used the National Subsidies underlying assets. Together with its subsidiaries, Everbright Environment completed issuances this year of medium-term and asset-backed notes as well as super & short term commercial papers. All of these issuances raised more than RMB5billion funds. This has not only increased the Company’s funding channels but also effectively replenished its working capital, optimised the Company’s financing structure, and kept its financial costs within a reasonable range. Everbright Environment will continue to monitor the market conditions in order to issue the remaining asset-backed notes. The Company will continue to look for new financing options to leverage capital market resources in order to better support the Company’s development pace, needs, and provide strong capital securities to ensure the Company’s steady, sustainable development.