Bank of Communications issues € 38 million offshore bonds for Hainan real sector – Business & Economy
HAIKOU, July 8. / TASS /. The representative office of the Bank of Communications of China (BOCOM) in Hainan Province, southern China, with the support of the Chinese State Administration of Foreign Exchange, recorded the bond issuance of offshore debt in the amount of 38 million euros to revive the market sector of the economy of the island, reported the Hainan Daily.
According to the newspaper, the bonds are owned by a Hainan-based pharmaceutical company that will be able to list them on stock exchanges in China and abroad. This commercial entity would have a track record of diversifying sources of financing and controlling exchange rate risks.
According to the calculations of the bank‘s specialists, offshore has enabled the company to reduce its costs by around 3% compared to traditional channels of increasing capitalization by issuing securities. BOCOM recorded the problem on a simplified template, which significantly reduces the time required to complete procedures.
In this case, an offshore is a segment of the structure of the national economy that has a relatively independent status and allows banks to provide a special set of services to residents and non-residents. The offshore bonds issued by China on Hainan are foreign currency debt securities which, thanks to the advantages of the free trade port, can reduce the costs of supplying cash to companies. A developed financial cluster is gradually being created on the island, which should become an important stimulus for the long-term development of the entire Chinese economy.