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Underwriting of Private Placement Notes

I. Introduction
Private Placement Note ("PPN") is a debt instrument issued in interbank bond market through private placement.

Private placement means direct sale of debt instrument by non-financial corporate entities to specific institutional investors ("private placement investors") in interbank market. Debt instrument in offer can only be negotiated among the specific institutional investors.

Depending on own funding requirement and use of funds, the issuers are recommended to discuss and sign Private Placement Agreement with the investors to settle such major factors as issuance size, term of the debt instrument.

II. Target Clients
Non-financial corporate entities established in People's Republic of China (excluding Hong Kong, Macau and Taiwan) who need to raise funds.

III. Functions and Features
Issuance, custody and settlement in private placement are basically identical to public placement. Private placement, however, is more flexible, easier offering and less information disclosure requirement, a good solution to meet the individual needs of customers and limited circulation. Moreover, private placement can better serve companies closely related to national economy and people's livelihood yet prefer to remain low profile, companies with a smaller scale and lower credit ratings, or companies need to raise capital to an amount near or over 40% of its net assets.

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 PPN as scheduled.

V. Product Price
The interest rate of this product depends on offering period, customer creditability and market conditions. Guiding opinions of regulatory authority and marked price are used as reference for price quoted.

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 issue the product.

VIII. Definition
Private placement investor: An institutional investor who can and wishes to buy debt instruments offered through private placement, having good understanding and able to bear the investment risk, and willing to be bound by the self-discipline rules of National Association of Financial Market Institutional Investors.

IX. Example
In May, 2011, ICBC underwrote the first private-placement bond - RMB 5 billion worth of 5-year bonds for Aviation Industry Corporation of China ("AVIC"). The issuance was also one of the first batch private-placement bonds in China market.

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.

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