China Development Bank has successfully completed the issuance of asset-backed securities worth 8 billion yuan (US$1.31 billion), the first batch since the country’s cabinet on Aug. 28 approved the expansion of a trial program on credit asset securitization.
The securities were backed by medium-term loans previously offered by China Development Bank to China Railway Corp. for the Kaiyuan railway project, the People’s Bank of China (PBoC) said in a statement on its website on Monday. They were issued through a tendering process and was oversubscribed 1.1 times. The coupon rate was set at 5.6 percent.
Net proceeds will be used to redevelop shantytowns and support important infrastructure projects, the PBoC said.
The expansion of the trial program on credit asset securitization is an important measure to push forward economic structural reform and industry upgrade, the central bank said. The PBoC will encourage qualified Chinese lenders to join the program to raise more funds to support small and micro firms as well as agricultural companies, it said.
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