Linklaters advises Tianjin Rail Transit Group as the first Chinese local government entity to raise funds via German Schuldschein loan market

Linklaters advised Tianjin Rail Transit Group on its inaugural German “Schuldschein” loan financing, raising a total of €200 million with a tenor of 10 years, in the German domestic Schuldschein loan market. This transaction represents the first ever German Schuldschein loan fund-raising by a Chinese local government entity.

Schuldschein are specific German law governed instruments which are used in the German market either for financing or investment purposes. These instruments combine the flexibility of bilateral arrangements, the privacy of over the counter markets and the tradeability of capital markets. German investors primarily compromise banks, savings banks and insurance companies as a buy-and-hold investment, which are very familiar with the standards established in the Schuldschein markets and appreciative of the compact documentation complemented by German civil law. 

Linklaters has previously advised on Tianjin Rail Transit Group’s inaugural US-dollar denominated bond offering and its Euro-denominated green bond offering.

The Linklaters team was led by partner Michael Ng and associate Xiaoming Zhong from the Hong Kong office and partner Alexander Schlee, managing associate Martin Rojahn and associate Rowina Ullner from the Frankfurt office. 

Capital Markets partner Michael Ng commented:

“We are pleased to have assisted our client in yet another market first. The Schuldschein market represented an efficient, low funding cost option for Tianjin Rail Transit Group that complimented its offshore bond offerings and loans which had been their traditional offshore funding channels. We expect more and more PRC corporates will access this funding channel in the near future given the depth of the market, its speed of execution and low funding costs.”

Linklaters is a leading expert in advising on Schuldschein loan and related transactions. They have advised on various transactions and aspects of the global market for Schuldschein over the last few years,  including Schuldschein issued by national and international corporates, collateralised Schuldschein loan transactions and structured Schuldschein loan transactions referencing various asset classes (equity, foreign exchange, interest rates, credit and commodity).