China Merchants Securities unit guarantees $82m in new notes

China Merchants Securities announced that its wholly-owned subsidiary, China Merchants Securities International Co. (CMSI), will provide a joint and several liability guarantee for medium-term notes issued by its indirect wholly-owned subsidiary, CMS International Gemstone Limited (SPV). The notes will have a total value not exceeding 600 million yuan and a term of three years. This covers all amounts payable under the notes and losses resulting from non-payment.

As of the day before the guarantee's effective date, CMSI's outstanding guarantee for CMS International Gemstone Limited stood at 1 billion yuan. CMS International Gemstone Limited, an SPV established in the British Virgin Islands, acts solely as an offshore bond issuer. While its asset-liability ratio exceeded 70% as of year-end 2024, CMSI holds 100% equity, allowing close monitoring of its solvency.

The guarantee is within the company's approved limits, with current guarantees for controlled subsidiaries totaling 500 million yuan, representing 0.38% of the company's latest audited net assets. The total maximum guarantee amount for CMSI and its controlled subsidiaries is HK$68 bn. The company has no overdue, litigated, or judgment-induced loss-bearing guarantees.