On 21 November 2024, S&P Global Ratings released an updated report expressing strong recognition of Fosun International (HKEX: 00656)’s recent US dollar note issuance. S&P noted that the successful issuance is positive for the company’s credit matrix as it helps broaden the Group’s funding channels, thereby maintaining a “stable” outlook on Fosun International’s rating.
S&P released the report following Fosun International’s successful issuance of USD300 million 3.5-year US dollar-denominated senior unsecured notes on 13 November. S&P pointed out that re-opening the offshore US dollar bond market which has been closed for more than three years reflects a significant improvement in Fosun’s creditworthiness and recognition from broad-based investors. The US dollar note issuance is positive in helping Fosun International to diversify its financing options, extend its debt maturities, and strengthen its liquidity buffer. Alongside the new note issuance, Fosun announced to tender its 2025 maturity bond up to equivalent amount of the new issue. This is to ensure that the new issue will not increase Fosun’s total outstanding interest-bearing debt.
It is reported that the note issuance attracted strong interest from a large number of mainstream institutional investors globally, with the order book reportedly exceeding USD1.2 billion.
According to various market sources, the successful issuance of the USD300 million notes was attributed to the company’s consistent focus on core business development, divestment of non-strategy asset, optimization of debt structure, and stabilization of international credit ratings over the past two years, helping Fosun to become one of the few Chinese private enterprises to regain vote of confidence from global investors in recent years. Amidst a backdrop of US rate easing cycle, Fosun continues to provide high-quality, secure, and long-term asset allocation options for its long-term supportive investors, thereby maximizing value for them.
S&P mentioned in the report that although the size of the USD300 million note issuance is not large, combined with the Group’s USD888 million offshore syndicated loan raised earlier in the end of September, as well as Fosun’s solid track record of refinancing onshore bank loans over past years, S&P believes Fosun has adequate liquidity buffer to meet its debt maturities obligation over the next two years. S&P reaffirmed a “BB-” stable rating to the US dollar notes and expects Fosun to continue divesting its non-core assets, leading to a steady decline in the Group’s debt. Furthermore, as offshore subsidaries reach maturity, Fosun International’s dividend receipts are expected to enhance significantly.
On 30 September, Fosun International announced the closure of a sustainability-linked syndicated loan totaling USD888 million through greenshoe, one of the largest of its kind issued by Chinese private enterprises this year. The loan is a three-year senior unsecured working capital loan and the participating banks include several leading banks from Greater China, the Asia-Pacific region, and Europe and the Americas. This reflects the continued recognition of the Group’s credit quality by both domestic and international banks, and indicates that the company’s sound financing channels will provide a solid foundation for its steady development.
Recently, research reports from several securities firms have pointed out that Fosun International’s strategy of focusing on its core businesses has yielded significant results. Among them, Northeast Securities released a research report on 15 November, noting that Fosun International, driven by its twin driver of “innovation + globalization”, has a clear strategic positioning and robust performance across its four business segments. Furthermore, Fosun has steadily improved its cash flow through optimizing asset allocation. Northeast Securities is optimistic about Fosun’s future prospects and has assigned the company a “Buy” rating.
