Beijing & Washington, DC, October
10, 2005—The International Finance Corporation, the private sector
arm of the World Bank Group, today launched a Panda Bond issue in the Chinese
domestic market. The RMB 1.13 billion (approximately US$140 million equivalent)
10-year bonds were placed with institutional investors in the national
interbank market. The bonds carry a 3.40 percent coupon rate and were issued
at par. The joint lead managers are China International Capital Corporation
and CITIC Securities.
The IFC issue marks the opening of the Chinese renminbi bond market to
international financial institutions. This transaction provides a model
for future high-grade issuers and helps deepen the overall capital markets.
"We are delighted to help open China’s domestic market with the Panda
Bond,” said IFC Vice President and Treasurer Nina Shapiro. "IFC’s
renminbi bond issue represents a small but important step for China’s
capital markets. We hope that this bond will facilitate further expansion
of the non-government bond markets in China and will increase access to
capital for private companies. IFC greatly appreciates the efforts of the
Ministry of Finance to spearhead this important Chinese Government initiative.”
IFC will use proceeds from the bond to finance three Chinese companies.
IFC will provide RMB 406 million to Guangzhou Development Industry Holdings;
RMB 65 million to Chindex International's United Family Hospitals; and
RMB 650 million to Anhui Conch Cement Company.
“The bond provides IFC with a unique opportunity to support high quality
domestic companies that need local currency financing,” said IFC Director
for East Asia and the Pacific Javed Hamid. “This bond issue is an important
part of IFC’s broader strategy aimed at developing the domestic financial
sector and local capital markets in China,”
IFC funds its lending activities by issuing bonds in the international
capital markets. The Corporation’s securities, which are rated Aaa by
Moody’s and AAA by S&P, have been issued in 33 different currencies.
IFC’s funding program for fiscal year 2006 is around $2 billion.
IFC has been the first, or among the first, nonresidents to issue in many
currencies including Colombian pesos, Greek drachmae, Hong Kong dollars,
Malaysian ringgit, Moroccan dirham, Singapore dollars and Spanish pesetas
in the domestic markets; and in Czech koruna, Philippine pesos and Polish
zloty in the eurobond markets.
Since 1985, IFC has invested more than $2 billion in 100 private sector
companies in China.
The International Finance Corporation, the private sector arm of the World
Bank Group, promotes sustainable private sector investment in developing
and transition countries, helping to reduce poverty and improve people’s
lives. IFC finances private sector investments, mobilizes capital in the
international financial markets, helps clients improve social and environmental
sustainability, and provides technical assistance and advice to governments
and businesses. Its 178 member countries provide its share capital and
collectively determine its policies.
From its founding in 1956 through FY05, IFC has committed more than $49
billion of its own funds and arranged $24 billion in syndications for 3,319
companies in 140 developing countries. IFC’s worldwide committed portfolio
as of FY05 was $19.3 billion for its own account and $5.3 billion held
for participants in loan syndications.
For more information, visit www.ifc.org
and www.ifc.org/treasury