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  Home Page > Corporate Banking >Financial market >Underwriting/Issuance >Underwriting of Super Short-term Commercial Papers
Underwriting of Super Short-term Commercial Papers
 

I. Introduction
Super Short-term Commercial Papers (SCP) are short-term promissory notes issued in the interbank bond market with maturities no longer than 270 days. They are usually issued by non-financial corporate entities with high credit ratings.

SCP is a type of debt instrument issued by non-financial companies. Depending on the requirement and use of funds of the issuer, offering period can be up to 270 days (inclusive). Currently, three of offering periods available are: 90 days, 180 days and 270 days.

II. Target Clients
Non-financial corporate entities established in People's Republic of China (excluding Hong Kong, Macau and Taiwan) with high credit ratings, need working capital in the short-term.

III. Functions and Features
Simple registration, customers only need to register at the National Association of Financial Market Institutional Investors ("NAFMII"), few information disclosure rules, fast registration and issuance, flexible in the use of funds. This is a service for customers to raise short-term funds. Net proceeds cannot be used for long-term investment.

IV. Advantages
1. Strong underwriting: ICBC is a Class A bond underwriting member under the Ministry of Finance, Class I trader of People's Bank of China's open market, the earliest commercial bank in China to be qualified for the underwriting of non-financial corporate debt instruments. For years ICBC has been named excellent underwriter and excellent trader by the Ministry of Finance and People's Bank of China.

2. Rich experience: ICBC has a team of professional staff experienced in bond underwriting, and a comprehensive, effective internal mechanism in place for customer service, credit risk assessment and underwriting execution.

3. Good relationship: ICBC maintains good contact with regulatory authority and good relationship with the investors. ICBC is able to underwrite SCP as scheduled.

V. Product Price
SCP interest rate is determined by the offering period, issuer's credit rating and market conditions.

VI. Service Channel and Hours
Customers are welcomed to contact ICBC directly during office hours, based on own financial requirements.

VII. Steps
1. Verify: Customers must supply application documentation to ICBC required by the regulatory authority. ICBC will proceed due diligence and assess credit risk.

2. Approval: ICBC sends the application documentation to NAFMII for approval.

3. Issuance: Once approved, NAFMII will inform the customers the registration. After that, customers can choose an "Announcement date" within 2 months to announce the offer and issue the SCP on the "offering date".

VIII. Example
ICBC business of underwriting debt instrument has been gathering pace over the past few years. For five consecutive years ICBC sits at the top of the league table. So far, ICBC has issued over RMB 100 billion of SCP for many companies. China National Petroleum Corporation, State Grid Corporation of China and China Unicom are some of the corporate clients that ICBC has served.

Note: Information herein is for reference only. Refer to the announcements and regulations of local outlets for further details. Industrial and Commercial Bank of China Limited reserves the final right of interpretation.


(2012-08-30)
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