简体中文 | ENGLISH


Online Banking

 
 

History

 
 


More Foreign Investment Utilized to Issue International Bonds (1979 - 1992)


 

In order to meet China's needs for utilization of foreign investment, after raising international commercial loans through the "three loan categories" (government loan, mixed loan and buyer's credit in export credit), Bank of China began to research into bond issuance on the international financial market. In November, 1979, it made a suggestion to People's Bank of China and State Import & Export Regulatory Commission that national bonds should be issued to raise funds. In 1984, with the approval of the central government, Bank of China began to issue bonds on the international capital market.

In November 1984, Bank of China issued samurai bonds in Tokyo, Japan for the first time, which was a 10-year issuance of JPY 20 billion with the issue price of 99.65% and the coupon rate of 7%. The lead manager for this issuance of bonds was Nomura Securities of Japan, and the principal trustee bank was Bank of Tokyo Ltd., Japan. The bonds issued by Bank of China were rated first class by Tokyo Market. The successful issuance opened up a new prospect for bonds issuance on the international financial market. In April 1985, less than half a year later, Bank of China issued JPY 20 billion of samurai bonds for the second time.


Bank of China issued bonds in Japan in 1984, as reflected in the prospectus shown above.

Besides Tokyo, Bank of China chose Singapore as another bond issuance destination in Asia. In April 1987, Bank of China issued the first batch of Asian USD bonds in Singapore, a 10-year issuance of USD 200 million at an interest rate of LIBOR +1/16%. In October 1992, Bank of China issued Asian USD bonds in Singapore again, a five-year issuance of USD 150 million at the interest rate of LIBOR+0.5%. The amount of subscription by the underwriting syndicate reached USD 400 million, which was well over the amount issued.


In April 1987, Bank of China issued USD 200 million of floating interest rate bond in Singapore.

Bank of China planned to issue bonds in Europe and selected London as the first destination. However, entry into London was impossible due to old debts left between China and the UK. Therefore, it was only possible for Bank of China to issue USD 200 million of five-year time deposit receipt in London via its London branch in 1985, which were well accepted by the market. In June 1985, Bank of China issued Deutsche mark bonds in Frankfurt for the first time, which marked its entry into the European market. The seven-year DEM 150 million bonds with 7% interest rate were accepted by the market. Subsequently, Bank of China issued Euro USD and DEM bonds in Frankfurt twice.

In 1987, Chinese and British governments reached an agreement on the settlement of old debts. In October of the same year, Bank of China issued five-year Euro USD bonds of USD 200 million at LIBOR + 1/16%. The issuance was a successful one, defining the market position of Bank of China in London market. In March 1988, it issued Euro JPY bonds in London again, which was a five-year JPY 15 billion at 5% interest rate.


In October 1987, Bank of China issued USD 200 million of floating interest rate bond in London.

From 1984 to 1992, Bank of China issued international bonds on the markets of Tokyo, Frankfurt, London and Singapore for 17 times in total. By the end of 1992, the balances of bonds issued were JPY 210 billion, USD 900 million and DEM 200 million respectively, equivalent to USD 2.694 billion in aggregate. The amount was increased by 15.2 times based on the first issuance.

According to international practice, the long-term funds raised by Bank of China in the international bond market were mainly lent to the petrochemical, steel, nonferrous metal, ocean transportation and other sectors, as well as to urban construction projects in Shanghai, Tianjin, Qingdao, Xiamen, Wuhan and other cities. Of all issuances, two batches of samurai bonds were used for early repayment of Japan energy loans to alleviate the interest burden of energy loans. The issuance of international bonds played a positive role in promoting the economic development of China.

  [ Close Window ]
Personal Banking Login
Personal Banking(VIP) Login
Corporate Banking Login



   Overview
   Anti-Money Laundering
   Corporate Social Responsibilities
   Organization
   History
   Awards
   Bank Card Gallery
   Commemorative Bank Notes



 
  Site Map | Contact Us | Term & Conditions | Copyright | 京ICP证 060399
 
Copyright © BANK OF CHINA(BOC) All Rights Reserved.