Yili's dollar bond debut wins the highest international credit rating

 - The issuance sets the lowest coupon rate among comparable enterprises and bonds

- Yili becomes the only A-rating diary company in China so far, and a Chinese consumer goods company with the highest international credit rating

On November 2020, Inner Mongolia Yili Industrial Group Co., Ltd. ("Yili Group" or "Yili" or the "Company", SHA: 600887), one of the world's top five dairy companies, successfully issued a five-year US$500 million bond, which was simultaneously listed on the Hong Kong Stock Exchange (HKEx).

The issuance sets the lowest coupon rate among comparable enterprises and bonds

The first international bond issued by Yili received offers totaling US$3.6 billion, seven times the issued amount, from a wide range of high-quality investors, including banking, insurance, fund, and asset management companies as well as other types of institutions.

During the pricing process, a 35 basis point rate cut was applied based on the initial price guidance, ensuring a final price of 125 basis points over U.S. Treasuries and a coupon rate of 1.625%, a record-low coupon rate for comparable bonds issued by enterprises from the same sector. Among the subscribers, there are abundant high-quality professional investment institutions, such as world-leading bond investment institutions, Hong Kong social security funds, foreign banks, and so on.

Yili becomes the only A-rating diary company in China so far, and a Chinese consumer goods company with the highest international credit rating

Moody's and Standard & Poor's recently assigned A3 and A- ratings, respectively, to Yili, making Yili the only A-rated dairy company in China to date and the Chinese consumer goods company with the best international rating. This also demonstrates international credit rating agencies' recognition of Yili's qualifications.

Yili's high rating reflects its leading position in China's dairy market, strong distribution capabilities, integrated business model that helps safeguard product quality, as well as its track record of maintaining a robust financial profile through the cycles. Yili's clear lead position across product categories is testimony to the company's product innovation capabilities. The company can cater to a wide range of consumer needs with its diversified portfolio of more than 1000 products.

In 2019, Yili generated a revenue of RMB 90.223 billion, achieving a year-on-year increase of 13.41%. This gave it the number one ranking among all Asian dairy companies for the sixth consecutive year and an increase of RMB 10 billion for the second year running. In the first three quarters of 2020, Yili Group continued to grow against the backdrop of the COVID-19 pandemic and generated a revenue of RMB 73.77 billion.

Moody's expects a similar growth rate over the next two to three years, underpinned by favorable demand for dairy products, its diversified and evolving product portfolio, and planned capacity expansion.