Chinese Companies Rush for US Listings ahead of New Rules

An Xpeng Motors showroom at the company's headquarters in Guangzhou, China. Reuters
An Xpeng Motors showroom at the company's headquarters in Guangzhou, China. Reuters
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Chinese Companies Rush for US Listings ahead of New Rules

An Xpeng Motors showroom at the company's headquarters in Guangzhou, China. Reuters
An Xpeng Motors showroom at the company's headquarters in Guangzhou, China. Reuters

The number of US IPOs by Chinese firms jumped in March, as some of them rushed to set up offshore listings before rules take effect that will complicate the process, though with markets jittery, several met with a tepid response.

Seven Chinese firms including Chanson International and Hongli Group have launched public offerings in March to raise a combined $82.3 million, compared with just four in the preceding two months, Reuters reported.

Although the numbers are not huge, the surge stands out since only six mainland China-based companies launched US IPOs in 2022 as Sino-US tensions and in particular strict regulatory scrutiny on both sides hurt investor demand for such listings.

China's new rules, published in February and which take effect on March 31, are aimed at reviving the path for international offerings, which all but disappeared in the wake of regulatory crackdowns beginning in the middle of 2021.

They also impose an approval system on a once freewheeling market, with a focus on national and data security, hence the hurry from some firms to get in ahead of them.

"There is obvious acceleration in Chinese companies seeking US offerings this month, considering the uncertainty posed by the new offshore listing rules," said Stephanie Hu, head of Asia, investment banking at EF Hutton, which was a bookrunner on Chanson's listing.

The new system requires submitting materials to the China Securities Regulatory Commission (CSRC) and getting the green light from relevant government bodies.

That will "reduce regulatory uncertainty" said Mandy Zhu, head of China Global Banking at UBS, and standardize domestic firms' international listings.

It is also likely to be time consuming.

Among the new listings was bakery chain Chanson International, which debuted on the Nasdaq on Thursday.

"It is, indeed, that we don't need to get approval from associated departments of China if we get listed before March 31," chairman and CEO Gang Li told Reuters.

"But we will abide by Chinese rules and carry out all follow-up work cooperation if necessary."

The listing raised a modest $13.6 million, and fell heavily in its first day of trading and closed almost 40% below the issue price, perhaps a sign that markets roiled by banking jitters are in little mood for small Chinese listings.

Earlier in the week, steelmaker Hongli Group, food grain manufacturer YanGuFang International Group and wheelchair-maker Jin Medical International listed in the US, also receiving tepid responses from investors.

Reuters reported on Thursday that London is also courting new Chinese listings.



Saudi Arabia Begins Marketing International Bonds Following 2025 Borrowing Plan Announcement

Riyadh (Reuters)
Riyadh (Reuters)
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Saudi Arabia Begins Marketing International Bonds Following 2025 Borrowing Plan Announcement

Riyadh (Reuters)
Riyadh (Reuters)

Saudi Arabia has entered global debt markets with a planned sale of bonds in three tranches, aiming to use the proceeds to cover budget deficits and repay outstanding debt, according to IFR (International Financing Review).

The indicative pricing for the three-year bonds is set at 120 basis points above US Treasury bonds, while the six- and ten-year bonds are priced at 130 and 140 basis points above US Treasuries, respectively, as reported by Reuters.

The bonds, expected to be of benchmark size (typically at least $500 million), come a day after Saudi Arabia unveiled its 2025 borrowing plan. The Kingdom’s financing needs for the year are estimated at SAR 139 billion ($37 billion), with SAR 101 billion ($26.8 billion) allocated to cover the budget deficit and the remainder to service existing debt.

The National Debt Management Center (NDMC) announced that Finance Minister Mohammed Al-Jadaan had approved the 2025 borrowing plan following its endorsement by the NDMC Board. The plan highlights public debt developments for 2024, domestic debt market initiatives, and the 2025 financing roadmap, including the Kingdom’s issuance calendar for local sukuk denominated in Saudi Riyals.

The NDMC emphasized that Saudi Arabia aims to enhance sustainable access to debt markets and broaden its investor base. For 2025, the Kingdom will continue diversifying its domestic and international financing channels to meet funding needs efficiently. Plans include issuing sovereign debt instruments at fair prices under risk management frameworks and pursuing specialized financing opportunities to support economic growth, such as export credit agency-backed funding, infrastructure development financing, and exploring new markets and currencies.

Recently, Saudi Arabia secured a $2.5 billion Sharia-compliant revolving credit facility for three years from three regional and international financial institutions to address budgetary needs.

In 2024, Saudi Arabia issued $17 billion in dollar-denominated bonds, including $12 billion in January and $5 billion in sukuk in May. Rating agencies have recognized the Kingdom’s financial stability. In November, Moody’s upgraded Saudi Arabia’s rating to “AA3,” while Fitch assigned an “A+” rating, both with stable outlooks. S&P Global rated the Kingdom at “A/A-1” with a positive outlook, reflecting its low credit risk and strong capacity to meet financial obligations.

The International Monetary Fund (IMF) estimated Saudi Arabia’s public debt-to-GDP ratio at 26.2% for 2024, describing it as low and sustainable. The IMF projects this ratio to reach 35% by 2029, with foreign borrowing playing a significant role in financing fiscal deficits.