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The first batch of bonds of China Development Bank (“CDB Bonds” for short) was listed through the auction trading system of the Shanghai Stock Exchange (SSE) on January 7. Relevant varieties listed are “CDB 1301” and “CDB 1302”. An amount of RMB0.51 billion has been traded on the very day, of which, “CDB 1301” claims a trading amount of RMB0.41 billion with its average trading price being RMB99.94, while “CDB 1302” claims a trading amount of RMB0.1 billion with its average trading price being RMB99.89. Listing and trading of CDB Bonds on the SSE marks the launch of policy-related financial bonds on the exchange market, as well as the continuous orderly rationalization of the interflow between on-floor and over-the-counter bond markets. After listing of CDB Bonds, all social public investors including individuals may participate in trading of CDB Bonds.
Issuance and trading of CDB Bonds on the SSE is a significant measure of strengthening reform of the bond market and promoting the interflow between on-floor and over-the-counter bond markets by the People’s Bank of China and the China Securities Regulatory Commission. According to an official of the SSE, regulatory authorities, in the first half of last year, decided upon the pilot issuance of RMB30 billion CDB Bonds on the SSE, as well as conducted an array of discussions and researches on the scheme of the pilot issuance, the arrangement of listing and trading, and the mechanism of regulation and coordination. Through active communication and close cooperation, the SSE and China Securities Depository & Clearing Corp., Ltd. have gone all out to carry out supporting work on business rules and procedures, according to the characteristics of CDB Bonds. The SSE and CDB issued relevant business rules and issuance measures respectively on December 24 and 25, 2013. The first batch of CDB Bonds was issued by tendering through the SSE bond issuance system on December 27, 2013, and it was distributed offline from December 30, 2013 to January 3, 2014. Besides, its registration work was completed on January 6, 2014. It is shown in the results of tendering and distribution that in addition to members of the underwriting groups, such as commercial banks, securities companies, and insurance assets management companies, China’s social security funds, insurance products, and enterprise annuities, and some individual investors have participated in subscription for CDB Bonds through underwriters. Thus, “CDB 1301” has become the first policy-related financial bond with the participation of individual investors in subscription.
According to sources, “CDB 1301” and “CDB 1302” are two-year and five-year bond varieties respectively, both of which are bonds with fixed interest rate. They are underwritten by the underwriting groups consisting 47 financial institutions, including 15 listed banks, 3 insurance institutions, and 29 securities companies, with Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of Communications, CITIC Securities, and Orient Securities as lead underwriters. The issuance volume of “CDB 1301” is RMB8 billion, with the coupon rate being 5.8%, while the issuance volume of “CDB 1302” is RMB4 billion, with the coupon rate being 5.84%.
An official of the SSE says that, the SSE will rationalize the pilot issuance of the remaining lines of CDB Bonds in the future, and study on bond products meeting the features of the exchange market. Moreover, under the guidance of relevant competent authorities, the SSE will improve the mechanisms for issuance and trading of policy-related financial bonds, and complete all-round preparation work for regular issuance of policy-related financial bonds on the SSE, in a bid to propel the sound development of China’s bond market.
