DEALS
Zhong Lun Assists the Successful Renewal of the Largest Scale CMBS Product in History Backed by a Single-purpose Shopping Center
Zhong Lun Assists the Successful Renewal of the Largest Scale CMBS Product in History Backed by a Single-purpose Shopping Center
On July 23, 2021, “CICC-Hopson-Beijing Chaoyang Hopson One Asset-backed Special Scheme" (“中金-合生-北京朝阳合生汇资产支持专项计划") (the “Special Scheme") was successfully issued. The Special Scheme will be listed and traded on Shanghai Stock Exchange thereafter. The Special Scheme was led and provided with credit enhancements by Hopson Development Holdings Ltd. (00754.HK). China International Capital Corporation Limited (CICC) acted as the manager of the Special Scheme. The total issuance scale of the Special Scheme is RMB 8 billion, which is the largest-scale commercial mortgage-backed securities (“CMBS") product in history backed by a single-purpose shopping center. The senior securities, which have a scale of RMB 7.5 billion, are rated AAAsf by China Lianhe Credit Rating Co., Ltd. The annual interest rate of the senior securities is 4.35%. The underlying assets of the Special Scheme is Hopson One Shopping Center located at the intersection of Guangqu Road and Xidawang Road in Beijing’s Chaoyang District. This is a high-end shopping center (with parking spaces) nestled at the conjunction of two most bustling arteries of Beijing Chaoyang CBD.
Zhong Lun provided the Special Scheme with a variety of legal services, including designing product proposal, conducting legal due diligence on underlying assets, drafting and revising transaction documents, and issuing legal opinions. The team was led by partner Huijun Ma and non-equity partner Yong Jia. Key members include associate Jiexian Zhou and associate Chonghao Qi.
The Special Scheme is a renewal product as the underlying assets were the basis of a previous successful issue of Great Wall Securities-Beijing Hopson One Asset-backed Special Scheme in June 2018 with a scale of RMB 5.6 billion, making it the largest CMBS product in the whole market in the first half of that year. This renewal has achieved a substantial increase in financing scale. The establishment and issuance of Beijing Hopson One CMBS in 2018 was also advised on by Zhong Lun.
The underlying assets are of high quality, and the product structure is well designed. Both the enthusiastic subscription of the investors and the record-breaking product scale reflect the high recognition from the capital market of Hopson Development Holdings Ltd. and its financial product. Meanwhile, this deal serves as another testimony to the advantages and strengths of Zhong Lun in legal services for real estate securitization.
