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Bank breaks ground with dollar issue

CHINA Investment Bank (CIB) is to become the first US-dollar bond issuer in China, tapping the vast foreign currency savings of the population.

Assigned as one of the 10 authorised borrowing institutions in the country, CIB has also obtained permission from the People's Bank of China and the State Planning Commission to issue US dollar notes this year.

''We are planning to issue a one-year bond amounting to US$50 million in September or October this year,'' CIB executive vice-president Qin Kerang said yesterday.

Interest margin will be set at one percentage point above the one-year deposit rate.

The bond issue is aimed at attracting the US dollar savings of the population, estimated at US$10 billion, according to Mr Qin.

''Unlike the renminbi bonds, this US-dollar bond should be very popular,'' he said. ''We have already received a lot of enquiries.'' The bank, established in 1981, specialises in medium-and long-term loans to industrial borrowers.

It raises funds from international and other sources for lending to enterprises in China to update equipment and technology.

Priorities are given to export-oriented projects engaged in technology transformation.

It has worked closely with the World Bank since its inception.

With a registered capital of four billion yuan (about HK$5.39 billion at the official rate), the bank has a branch network spanning 22 provinces, autonomous regions and municipalities.