BAIC Financing RMB 1.5 Billion to Support Powertrain Base Construction
On July 24, 2012, the reporter learned from the Central Government Debt Company that BAIC Group will issue 1.6 billion yuan of corporate bonds starting from the 25th, and the funds raised will be mainly used for the construction of the powertrain base production area of ​​its Beijing Automotive Powertrain Co., Ltd. . According to the plan, by 2015, the base will form an annual production capacity of 400,000 sets of advanced gasoline engines , 300,000 CVT transmissions, and 300,000 MT transmissions .
The bond prospectus published by Beijing Automotive Group shows that the corporate bonds in this period have a fixed interest rate for a term of 7 years. At the end of the fifth year, the issuer raised the coupon rate option and the investor’s option to sell back; the bonds will be invested in institutions using bookkeeping methods. For the issuance, the coupon rate is fixed for the first 5 years within the bond duration. At the end of the 5th year, the issuer may choose to raise the annual coupon rate of the bond for 2 years after the bond duration to 0-100 basis points.
According to the plan, the issuance period of bonds is 3 working days from the 25th to the 27th. According to the comprehensive evaluation of Dagong International Credit Rating Co., Ltd., the credit rating of this bond is AAA, and the long-term credit rating of BAIC Group is AAA.
According to a report from Beijing Auto Group, of the 1.6 billion yuan raised in this issue, 1.2 billion yuan will be used for the Beijing Bazhou Powertrain Co., Ltd. powertrain base production area (phase 1) construction project of BAIC Group, 300 million yuan. Yuan is used to repay bank loans and RMB 100 million is used to supplement working capital.
It is worth noting that, compared with the past, BAIC Group’s financing costs have fallen sharply: According to the bond offering statement, the coupon rate for the 5-year period prior to the company’s debt maturity period ranged from 3.68% to 4.68%; and from 2009 to 2011, BAIC Group issued four rounds of bonds totaling 3.3 billion yuan, and the financing costs were higher than the current issuance. Among them, the 5-year corporate bonds issued in 2009 had an interest rate of 5.68%, and the relatively low-cost half-year period of the 2011 5-year issuance. The coupon coupon rate also reached 5.26%.
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