The International Finance Corporation (IFC) and the Asian Development Bank (ADB) yesterday launched their debut renminbi-denominated bonds, the first time a foreign institution has issued local currency bonds in China.

The IFC's 1.13 billion yuan (US$140 million) 10-year bonds were put on sale for institutional investors in China's inter-bank market. The bonds carry a 3.40 percent interest rate and were issued at face value. The joint lead managers are China International Capital Corporation and CITIC Securities.

The IFC will use the proceeds from the bonds to finance three Chinese companies. It will provide 406 million yuan (US$50 million) to Guangzhou Development Industry Holdings; 65 million yuan (US$8 million) to Chindex International's United Family Hospitals; and 650 million yuan (US$80 million) to Anhui Conch Cement Company.

The ADB's 1 billion yuan (US$123 million) bonds mature in 10 years, and have a fixed interest rate payable annually.

The ADB and lead manager BOC International (China) Ltd will undertake roadshows to publicize the bonds today and tomorrow in Shanghai and Beijing. The bonds will also be issued on the inter-bank market with clearing and settlement through the China Government Securities Depository Trust & Clearing Co Ltd.

China is the third country after India and the Philippines, where the ADB plans to undertake local currency financing. The yuan-denominated bonds issuance by the IFC and the ADB marks the opening up of the Chinese renminbi bond market to international financial institutions.

(China Daily October 11, 2005)