China Longyuan Power’s Low-Cost Funding Boosts Renewable Ambitions Amid Global Volatility

On April 18, 2025, China Longyuan Power Group Corporation Limited—China’s largest wind power producer—secured RMB2.0 billion (approximately USD280 million) through a three-year mid-term note issuance, marking a strategic move to bolster its financial flexibility and renewable energy projects. The bonds, priced at a coupon rate of 1.78%, highlight investor confidence in the company’s creditworthiness and its role in China’s energy transition.

The ultra-low coupon rate—a full 40 basis points below the 10-year China government bond yield of 2.18% as of April 2025—is a testament to the company’s robust credit profile.

S&P Global Ratings and Moody’s Investors Service reaffirm the company’s "A-" and "A3" ratings, respectively, with stable outlooks, underscoring its status as a financially secure, state-backed entity. These ratings are among the highest for Chinese corporate issuers, reflecting the company’s strong balance sheet and government support.

Key Drivers of the Issuance
The proceeds will primarily fund working capital needs and refinance existing debt, which the company aims to use to reduce financing costs and improve liquidity. Notably, this issuance is part of a broader strategy to channel funds into green projects. The bonds are classified as green bonds, aligning with China’s goal to achieve carbon neutrality by 2060.

The company’s prior bond issuance in 2023—a RMB3.0 billion note—was early redeemed, suggesting proactive management of its debt portfolio. This refinancing activity, combined with the new issuance, allows Longyuan to capitalize on falling corporate bond yields in China.

Market Context and Competitive Advantage
Despite global economic headwinds, including U.S.-China tariff tensions, China’s bond markets have remained resilient. Analysts at Bloomberg note that yields on top-rated corporate debt have declined as investors anticipate further monetary easing. This environment has enabled issuers like Longyuan to secure financing at historically low rates.

The company’s position as a leader in renewable energy also gives it an edge. China aims to increase non-fossil fuel energy consumption to 25% by 2030, and Longyuan’s vast wind farm portfolio—spanning over 20 provinces—positions it to benefit from this growth.

Investor Implications
For bond investors, the three-year notes offer a safe haven in a volatile market, backed by a stable credit rating and a government-linked business model. Meanwhile, equity investors might see the issuance as a positive signal of financial health. Longyuan’s stock, listed in Hong Kong as 00986.HK, has outperformed broader market indices in recent quarters, rising 15% since early 2024 amid growing demand for ESG-aligned assets.

Conclusion
China Longyuan Power’s recent bond issuance exemplifies how strong credit quality and alignment with national policy goals can unlock low-cost capital even in turbulent times. With a coupon rate of 1.78%, the company secures financing at a fraction of the cost of many peers, reinforcing its capacity to expand renewable energy infrastructure. Supported by top-tier credit ratings and a strategic refinancing approach, Longyuan is well-positioned to capitalize on China’s green energy ambitions.

The data tells a compelling story: its low borrowing costs reflect investor confidence in its credit profile, while its green bond designation taps into global ESG demand. As China moves toward cleaner energy, Longyuan’s leadership position and financial agility make it a critical player in the transition—and a compelling investment opportunity.