CCDC Supports Foreign Institutions’ Participation in China Local Government Bonds Issuance
On July 19, with
the support of CCDC Shanghai Headquarters, Shanghai Municipal Government successfully
issued in China inter-bank market the local government bonds of 34.33 billion
yuan on the MOF Local Government Bond Issuance System.
In response to the
requirements of deepening financial reform and opening up, and in order to implement
policies to lift restrictions on foreign banks’ participation in local
government bond underwriting business, further leverage the advantages of
foreign financial institutions, promote the diversification of local government
bond investment base, and better utilize various types of capital to support
regional economies, the underwriting group of this issuance included two
foreign banks, Standard Chartered Bank (China) Co., Ltd. and DBS Bank (China)
Co., Ltd., the first foreign-funded financial institutions participating in the
issuance of domestic local government bonds.
The tender result suggests
an oversubscription by all investors. The bidding multiples of various terms ranged
from 2.56 to 3.43 times, and the total amount of foreign bank bids reached 330
million yuan. Specifically, the total amounts of issuance of Shanghai Municipal
Government general bonds reached 30.28 billion yuan, including three-year,
five-year, seven-year, and ten-year varieties, and the winning bid rates are
3.24%, 3.32%, 3.55%, and 3.57%, respectively; the total amounts of issuance of special
bonds reached 4.05 billion yuan, including two maturities of five years and
seven years, and the winning bid rates are 3.30% and 3.48% respectively.
As the national
core financial infrastructure, CCDC provides technology support and integrated
lifecycle services, including information disclosure, registration and depository,
transaction settlement, interest payment, collateral management and bond
valuation, for the issuance the local government bonds, which are highly
recognized by all parties involved.