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Shanghai Chengtou, or City Construction & Investment Development Company is planning to issue 3 billion yuan (US$370 million) worth of 2005 Shanghai City Construction Bonds to help finance the city's infrastructure projects.
Applications for the bonds were being taken as of yesterday until August 9, 2005.
The bonds are open for purchase by individuals with a Chinese identity card, and companies or institutions incorporated in China.
The issuing consists of 2 billion yuan in 10-year fixed-rate bonds and 1 billion yuan in 15-year fixed-rate bonds. The coupon rate for the 10-year bonds is 4.98 per cent per year and 5.18 per cent for the 15-year bonds.
The bonds are sold in units of 1,000 at their face value of 100 yuan (US$12.33) each.
Shanghai Chengtou is a professional investment holding company mainly engaged in the raising of capital and the management of the city's various infrastructure construction and maintenance contracts.
Founded in 1992 by the Shanghai municipal government, the company has a registered capital of US$3 billion. Since its inception, Shanghai Chengtou has been involved in over 40 city infrastructure projects, including the construction of the Yangpu and Nanpu bridges, the inner city elevated road systems and both the No 1 and No 2 underground railways lines.
The company has raised a total of 130 billion yuan (US$16 billion) for the financing of the many different projects. It also posted a net profit of 719 million yuan (US$89 million) for 2004 with net capital of US$7 billion.
The bonds are to be underwritten by China's Development Bank and Shenyin & Wanguo Securities. Distributors include Shanghai AJ Corporation, Shanghai Security and seven other securities companies.
Shanghai Chengtou said the bonds are "unconditionally and irrevocably" guaranteed by China Development Bank for two years. It said that the bonds have obtained a triple A rating in a "comprehensive evaluation" by Shanghai Brilliance Credit Rating & Investors Service.
The funds raised in this bond issue will be invested in the fourth project for harbour garbage disposal facilities and the second project of the Suzhou Creek environmental improvement scheme. Total expenditure on these projects is estimated at 4.736 billion yuan (US$600 million), Shanghai Chengtou said.
(China Daily July 28, 2005)
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