Industrial Bank : China’s First Medium-term Notes in Support of “Belt and Road” Successfully Released

Recently, the reporter learned from Industrial Bank (IB) that it has successfully underwritten the 'phase I medium-term notes of Yining State-owned Asset Investment Operation Co., Ltd. for 2017'. This bond features a registered amount of RMB 1.5 billion, the initial offering of RMB 600 million for a term of 3 years, the facility rating of AA, the offering rate of 5.09% that is lower than other bonds on the market that are offered in the same period with the same rating and term, thus effectively reducing the financing cost for the issuer.

As one of China's first medium-term notes in support of 'Belt and Road', its successful offering symbolizes an innovation and breakthrough of the interbank bond market in facilitating the implementation of 'Belt and Road' strategy. The Xinjiang Uygur Autonomous Region is located within the core area of the Silk Road economic belt. Kazak Autonomous Prefecture of Ili is an opened window of Xinjiang for the west, a core city bridging our inland areas and Central Asia, and the gateway of the Eurasia Land Bridge. As the capital city of Kazak Autonomous Prefecture of Ili, Ili city is a key city along the Silk Road economic belt.

According to introductions, Yining State-owned Asset Investment Operation Co., Ltd. has undertaken the construction and operation of most part of infrastructure and utility facilities in Yining city, so as to provide direct services and important guarantee for the implementation of the 'Belt and Road' strategy. A part of the fund raised by this bond will be used for constructing the Yining Bonded Logistics Center which will play an important role in the trade between China and Central Asia.

Headquartered in Fujian Province, a core area of the Marine Silk Road, IB has, in recent years, relied on comprehensive advantages of the group in multiply licensed operation, actively involved and seized the historical opportunities brought about by the implementation of the 'Belt and Road' strategy, formulated the overall development plan of the 'Belt and Road' strategy, and intensified the institutional layout and resource input. The plan of 'Belt and Road' strategy has basically covered all provincial and municipal branch offices. Meanwhile, the 'domestic + overseas' and 'commercial bank + investment bank' modes provide enterprises with diversified financial services and solutions via debt financing tools, industrial fund, trust, trade financing and cross-border financial products in an innovative way.

In 2015, IB actively participated in and initiated the launch of China's largest special fund for the Silk Road - 'Silk Road Gold Fund'. This fund, with a planned scale of RMB 100 billion, will raise and manage several funds and one FOF (fund of funds), so as to further exert the financial attribute of gold, drive the internationalization of Renminbi, and so increase the influence of the 'Belt and Road' strategy. It is noteworthy that as the exchange rate fluctuation has increased since last year and import & export enterprises have more demands for exchange rate hedging products, IB uses forward foreign exchange, foreign exchange swap, currency swap, options and other derivative products to help clients avoid the increasing risk of exchange rate fluctuation. The transaction amount reached RMB 200 billion in 2016, which helped enterprises hedge against exchange risks and lock up financial cost.

IB expressed that National Association of Financial Market Institutional Investors has offered great support in the process of bond registration and offering. Great efforts have been made to push forward the progress and make sure the raised fund is in place, so as to address the capital needs of issuers for project construction proposed in the 'Belt and Road' strategy.

In the future, IB will set up branch operations in 'Belt and Road' districts (such as Southeast Asia) that are characterized by active RMB transactions, similar culture background and advantageous presence of IB, so as to establish an international service network stably. IB board of directors has resolved to set up CIB International Financial Holdings Limited in Hong Kong. The purpose is to link up all sectors of the group, provide comprehensive financial services, such as deposit, settlement, financing and securities, for enterprises to go global, and play a bigger role in the implementation of the 'Belt and Road' strategy.