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China : ICBC to Become the First Exclusive Issuer of EIBC OTC Bonds

June 26, 2014

ICBC will, for the first time, issue the policy financial bonds of Export-Import Bank of China ( EIBC Bonds ) from June 17 to June 20 to retail customers and non-financial institutions. The EIBC Bonds comprise 2-year fixed-rate coupon-carrying bonds and 1-year discount bonds, which can be subscribed for through the e-banking channels and outlets of ICBC.

Discount bonds refer to the bonds issued at a price below the face value, carrying zero coupon rate, and with the principal redeemed at face value upon maturity. The difference between the face value and the issue price of the bonds is seen as the interest income. Industry experts point out that investors with short-term investment needs may purchase discount bonds with relatively less initial investment amount than coupon-carrying bonds of the same face value. Meanwhile, as most of the OTC bonds are coupon-carrying, which offers few options for investors, the issue of the EIBC discount bonds helps to diversify bond product offerings and provide investors more investment options. For investors with medium and long-term investment needs, the two-year fixed-rate bonds offer them relatively higher investment returns and more term choices, and can meet their demand for medium and long-term asset allocation.

Investors can subscribe for the EIBC Bonds by logging on to ICBC internet banking or mobile banking, dialing telephone banking or going to ICBC outlets, designating a capital account for bond transactions, and opening a bond custodial account. Personal internet banking customers, after logging on to ICBC internet banking, may enter the Online T-bond Service column, click the Buy button on the right of the bonds to be subscribed under the Market and Transaction section , and continue operations as instructed to complete the subscription. The EIBC Bonds will become negotiable upon closing of the issue period. Customers can buy or sell the bonds during the trading hours through ICBC e-banking channels or at its outlets, with funds settled on real-time basis.

As a key measure to develop inclusive finance, the EIBC OTC bonds distributed through ICBC channels can further diversify the product line of OTC retail bonds, and better meet the investment and trading needs of the public for bond products. For bond issuers, distributing and trading bonds through the channels of commercial banks helps broaden financing channels, lower financing risks, and better bring into play the supporting role of finance to foreign trade enterprises and overseas investment.

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Source: TendersInfo (India)

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