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Bond Underwriting

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Bond Underwriting

I. Overview

(i) Fully licensed underwriter

· CDB is the largest bond bank in the world;

· CDB is the most fully licensed bond underwriter in China;

· CDB is the first Chinese financial institution to launch the bond underwriting business;

· Since launching bond underwriting in 2001, CDB has underwritten over 1,000 bonds totaling more than RMB 2 trillion, making it a leading bond underwriter in China.

(ii) Business characteristics

· Serving national strategies through development finance, and mobilizing financial resources to support “Infrastructure, Basic/Pillar Industries” and other key sectors throughout credit financing operations at CDB;

· Bonds underwritten by CDB are mostly enterprise bonds in underdeveloped regions, such as northeastern, central and western China. Long-term credit bonds are issued as a supplement to financing provided by commercial banks, highlighting the role played by CDB as a development finance brand;

· CDB developed an extensive bond marketing network as the foundation for successful bond issuance.

(iii) Performance in recent years:

· Since 2001, CDB acted as the lead underwriter for more than 1,000 bonds totaling over RMB 2 trillion;

· According to statistics released by the leading global financial data service provider, Dealogic, CDB underwrote the largest number of medium- to long-term bonds among Chinese bond investment banks between 2012 and 2014, and ranked among the top-10 bond underwriters in Asia Pacific (except Japan);

· In 2014, the total volume and revenue of bond underwriting businesses undertaken by CDB hit new highs – a total of 429 bonds were underwritten, corresponding to an underwriting volume of RMB761.6 billion.‘

 

II. Product Innovation

CDB achieved rapid business growth in pursuit of self-transcendence. Leveraging our advantages as a bond bank, we always supported the development of China’s credit bond market through innovation, and have remained one of the leading innovation powerhouses in the country.

2001: We are the first Chinese bank to issue a credit bond through bookkeeping filing: we assisted China General Nuclear Power Group (CGN) in issuing the RMB 2.5 billion “01 CGN Bond” through bookkeeping filing where the interest rate was determined through consultation between the issuer and the lead underwriter, known as the “book-building mechanism”;

2003: First collective bills in China: we assisted 12 high-tech companies in issuing the RMB 800 million “03 High-tech Bond” characterized by separate debts and guarantees and bundled issuance under the same title. It is the first joint corporate bond ever issued in the Chinese bond market;

2004: First exchangeable bond: we introduced exchangeable bond as an innovation of enterprise bonds and assisted China Huadian Corporation (CHC) with the issuance of the RMB 3 billion “04 CHC Bond”;

2006: First bond issued on a securities exchange: we assisted Luneng Group in issuing the RMB 1 billion “06 Luneng Bond” online at the securities exchange;

2007: First bond benchmarked against SHIBOR: we assisted Sinochem in issuing the RMB 1.5 billion “07 Sinochem Bond”, the first bond benchmarked against SHIBOR.

2010: We assisted Central Huijin Investment with the issuance of an RMB 109 billion corporate bond;

2011: First RMB 7.1 billion local government bond: we assisted the Shanghai Municipal Government with the issuance of the first local government bond (RMB 7.1 billion) in China;

2012: First privately raised bond for affordable housing projects: we assisted Beijing Affordable Housing Investment Center in issuing the first privately raised bond (RMB 6 billion) in China;

2013: First bond-loan compound product: we assisted Yueyang Urban Development Investment Group in issuing the first bond-loan compound product (RMB 1.8 billion) in China;

2014:

14 May: We acted as the lead underwriter for the issuance of the first “carbon emission” MTN in China, introducing the “green bond” concept in the Chinese bond market;

11 July: We acted as the lead underwriter for the issuance of China’s first yield notes for the integrated underground transport hub project of Zhengzhou Jiaotou Dikun Indusrial Co., Ltd. It marks a successful application of the PPP model to municipal construction projects;

8 November: We acted as the lead underwriter for the issuance of the first “supply chain” medium notes in China, as part of an effort to reduce financing cost for small and medium enterprises.

2015: First CDB bond benchmark notes

Jan. 2016: First English bond offering announcement

We are determined to keep the innovation drive going…

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