On Nov.23rd, under the approval of People’s Bank of China, Sinochem issued short term (one year) RMB commercial paper with the denomination of 5.4 billion RMB in interbank bond market. The interest rate of the commercial paper is 3.4661%. Sinochem, with the credit rating as AAA, has its commercial paper rated as A-1 this time. CITIC Securities and CITIC Bank played the role as the chief underwriter and China Everbright Bank assumed as the financial consultant.
This is the second time Sinochem has issued the short term RMB commercial paper. The denomination increased by 2.1 billion RMB comparing with the 3.3 billion of issuance in 2005 to satisfy the demand of current assets of Sinochem’s petroleum, fertilizer and chemical businesses.
Short term commercial paper is issued by the non-financial corporation with legal person status. It usually bears the lower interest rate comparing with the bank loan.
By issuing the short term commercial paper, Sinochem further diversified its financing channel. It also create the credibility which paved the ground for Sinochem’s sustainable financing and long term bond’s issuance in the future.