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Annie Shen - Fangda Partners
Annie Shen is a partner at Fangda in the Debt Capital Markets (DCM) practice. Her specialities include offshore bond offerings, debt restructuring, IPOs and equity offerings, cross-border investment, and digital assets. She recently completed the world's first carbon compliant token issuance on DigiFT in Singapore.
Published: 19 Mar 2026, by Wilson Lam, Kong Ching Ping, and Linda Zhou
DCM Practice in Hong Kong
1. What is it like working in the DCM practice in Hong Kong? Debt Capital Markets, or DCM, involves helping companies raise capital through bond or debt issuance in the capital markets. Lawyers in this area mainly focus on disclosure documents, due diligence, transaction documents drafting, regulatory compliance, and execution discipline throughout the DCM deal lifecycle. These deals are typically quite fast-paced compared to many other practices, therefore disciplined project management, close co-ordination among working parties and timely delivery is crucial. Hong Kong is the primary centre of China’s offshore RMB DCM practice, acting as a bridge between PRC issuers and global investors. The practice covers PRC state-owned enterprises (SOEs), private corporations, sovereigns, and global banks. We typically operate under English or Hong Kong law as governing law, with a PRC regulatory overlay. Lately this landscape has become more complex due to geopolitical tensions, sanctions, ESG considerations and nascent asset structures (e.g. real world assets, or RWA). 2. Can you walk us through a general bond issuance deal? As bond issuances are flexible and market-driven, deals can vary drastically in terms of timelines. A typical deal usually spans across 4 to 8 weeks from kick-off to closing. There are a few general steps. First, the issuer engages the lead managers. Then there is a discussion on legal structure. This may cover whether the deal is Reg S or 144A, whether it is standalone, guaranteed, or supported by an SBLC (standby letter of credit), the choice of listing venue and governing law, and whether the offering is public or private. Regulatory filings may be required, for example, NDRC approval or filing for PRC offshore issuances. The working parties are then formally engaged and due diligence on the issuer conducted. The transaction documents are then drafted, which usually include the Offering Circular (the “OC”), Subscription Agreement, Terms and Conditions (included in the OC), Trust Deed and Agency Agreement. Legal opinions are prepared, confirming matters such as the company being duly incorporated and having proper authority to enter into the transaction. The deal then moves to the roadshow and bookbuilding stage, where investors are engaged. After that, the bonds are launched and priced. The Offering Circular and Subscription Agreement are finalised. Finally, signing and closing take place, and the bonds are listed. 3. How do bond issuance deals usually fail? Bond deals can fall through for several reasons. One common reason is weak investor demand. If market sentiment deteriorates, the bonds cannot be successfully placed. Another reason is regulatory approval. If required approvals are delayed or not obtained, the deal cannot proceed. Pricing dynamics also play an important role. For example, if USD interest rates are very high, issuing USD bonds may incur higher financing costs than expected and therefore less attractive. 4. How do lawyers and bankers coordinate on a DCM deal? On a typical DCM deal, investment bankers take the lead on overall project management, market intelligence, investor engagement, pricing and bookbuilding, whilst lawyers typically are in charge of legal documentations, including drafting and negotiation of disclosure documents, risk factors, compliance, listing, closing precedents and closing mechanics. Lawyers and bankers coordinate and work closely on deal structure, investor roadshows, investor feedback, sanctions KYC and timetable management. RMB Bond Issuance
5. What should corporate clients be considering when they decide to issue RMB denominated bonds as opposed to USD or HKD bonds? And what concerns do clients have when choosing the listing venue? The choice of the denominated currency primarily depends on the purpose of the funds raised. For example, a Chinese company in need of USD to operate its business in the United States would issue USD-denominated bonds. Accordingly, the increase of RMB-denominated bonds issued by non-Chinese companies or foreign countries/companies is a result of the expanding use of RMB outside of China. A secondary reason can be the fluctuation of currency rates and hedging costs, since it affects the financing costs of the bonds. From a broader strategic perspective, RMB-denominated bonds improve investor diversification and allow access to offshore RMB liquidity. As for listing venues, in contrast to the centralised trading and settlement model for equities, bonds are still traded over-the-counter. Therefore, the location of bond listing would not matter much in terms of trading mechanics. It is the abundance of investors and traders that determines a city’s status as a centre of RMB-demoninated bonds. Listing is optional for bonds. In general, listed bonds may be more attractive for certain investors because listed bonds are subject to more compliance control under the Exchange Rules as opposed to bonds which are privately placed. However, venue choice is often driven by investor positioning rather than mechanics or trading volume. Some popular listing venues for our clients include Hong Kong, Macao, Singapore and Luxembourg. 6. In light of geopolitical tensions, what legal safeguards do you recommend for dim sum bond issuers to protect against sanctions risks? At the outset, sanction risk for bond issuance is not related to the denominated currency but the company itself, and the intended use of proceeds. If the proceeds are used for sanctioned purposes, regulatory intervention can be triggered. In terms of legal strategy to prevent this, firstly there must be more robust sanctions representations and ongoing compliance covenants. To comply with this, we draft workable provisions covering designation and compliance, and notification undertakings if risk crystallises. Further, we use clear use-of-proceeds language to comply with government sanctions, this is especially important for sovereigns and state-owned enterprises. Process integrity also matter. To align closely with bankers on screening and selling restrictions, we enhance KYC where possible. Governing law and enforcement strategy are carefully assessed, mainly on enforceability and asset location of the issuers. Illegality and force majeure protections are also considered. 7. How is the increasing participation of sovereign issuers in the dim sum market reshaping legal advisory practices, particularly around sovereign immunity waivers? In terms of bond issuances, sovereigns have completely different considerations compared to corporate clients. For example, corporate clients require comprehensive and complex investigations to be satisfied with due diligence, whereas sovereigns need not be so. This is because sovereigns are in general more credible and are the supervisors of the game of finance themselves. Even due diligence for countries with a record of sovereign defaults would be minimal compared to that for corporates. In terms of sovereign immunity waivers, they are rare, yet heavily negotiated and scrutinised for scope, jurisdiction and the line between commercial and sovereign acts. It is expected that central bank and diplomatic assets are excluded; investors care about what remains attachable. To identify this, enforcement analysis is central. One way is to look at asset mapping and recognition of judgments across jurisdictions. SOE relationship scrutiny is also important, particularly how alter ego risk and state-linked asset exposure affect disclosure. So yes, with sovereign issuers there is a shift in advisory focus from drafting clauses to modelling enforcement reality under stress.
RWA Tokenisation
8. How does a lawyer support the process of RWA tokenisation? And can you break down your approach in the recent carbon credits tokenisation? RWA tokenisation is very similar to bond issuance in function, essentially it is where an issuer issues debt to buyers through the blockchain. This falls under HKMA’s principle of “same activity, same risk, same regulation”. The general process of RWA tokenisation includes the asset layer, the token layer, and the regulatory layer. The asset layer sets up the legal structure of the RWA, particularly the nature of the legal right, its transferability, custodianship structure and true sale. The token layer tokenises the securities classification, licensing and offering restrictions in the form of smart contracts. After formulating the token, the regulatory layer ensures the token complies with SFC perimeters, AML/KYC, and cross-border compliance. However, since RWA is such a nascent technology, no two deals are the same. For the carbon credit deal we have done recently, registry validation, retirement mechanics and smart contract risk disclosures were crucial. Counsel must ensure alignment between on-chain representation and off-chain legal rights. I’m generally positive in the developments for this sector in the long run. In the short term, liquidity is a challenge for RWA products. There is already a well-established spectrum of products with potentially greater returns - bonds, equities, commodities, crypto, REITs, money market funds. Under this backdrop, it can be hard to persuade investors to venture into new RWA products – especially when it entails potential opportunity cost for not investing in old product forms. The carbon credits tokenisation was successful because: 1. Over-the-market trading for carbon credits is well-developed, and centralisation of trading and settlement implemented by tokenisation will make trading even more convenient for the investors; 2. Carbon credits are easily redeemable; and 3. Carbon credits can be easily split. These can be seen as the benchmark for what constitutes a successful tokenisation deal.