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China Exim Bank Financial Bonds Debut On The Exchange Market, Diversifying The Interest Rate Bond Varieties Of Shenzhen Stock Exchange

Date 15/07/2019

On July 12, The Export–Import Bank of China ("China Exim Bank") successfully issued CNY 5 billion of financial bonds through the bidding and issuance system of Shenzhen Stock Exchange ("SZSE"). The debut of China Exim Bank financial bonds on the exchange market further has diversified market interest rate bond varieties of SZSE and is of great significance to enhancing the exchange bond market's ability to serve the Belt and Road Initiative and real economy. So far, SZSE's bond market has covered all development and policy banks.

China Exim Bank financial bonds were issued in two tranches. The first tranche is worth CNY 3 billion, with a one-year term, an interest rate of 2.5% and a bid-to-cover ratio of 4.96. The second tranche is worth CNY2 billion, with a two-year term, an interest rate of 2.99% and a bid-to-cover ratio of 6.2. Twenty-three underwriting syndicate members participated in the bidding. Specifically, the contracts awarded to securities companies and banking members accounted for 64.2% and 35.8%, respectively.

China Exim Bank is a state-owned policy bank that supports China's foreign economic and trade investment and international economic cooperation. Backed by national credit, it plays an important role in maintaining stable growth, making structural adjustments, supporting foreign trade development, implementing the "Go Global" strategy, and serving the Belt and Road Initiative. All funds raised through the bonds will be released by China Exim Bank through credit loans. On the one hand, the issuance of China Exim Bank financial bonds on the exchange can help the exchange market to further refine bond variety structure and enrich the exchange's interest rate bond varieties. On the other hand, it can help expand the bond issuance channels of China Exim Bank, diversify the bond investors and enhance the bond liquidity.

SZSE has been committed to increasing the tiers of financial market products, refining the bond market product structure and continuously improving the bond market product categories and service capabilities. Up to now, the issuance of high credit rating products (such as local government bonds and policy financial bonds) has been normalized. In recent years, SZSE has continuously pushed forward the cross-market issuance of financial bonds of policy banks. China Development Bank has made initial and subsequent issuances of financial bonds totaling CNY52.62 billion on SZSE. Agricultural Development Bank of China has issued the financial bonds worth CNY10 billion on SZSE. Under the leadership of China Securities Regulatory Commission, SZSE will give full play to its market advantages and resource allocation function, strongly support the financial bond innovation of policy banks to serve national strategies, and continuously enhance the services for bond issuance to promote the high-quality development of its bond market.