Chang Hwa Commercial Bank (彰化銀行) yesterday listed its first batch of Chinese yuan-denominated bonds on Taiwan’s over-the-counter (OTC) market.
The bank’s listing of 1 billion yuan (US$163.9 million) worth of bonds was the fourth yuan-denominated bond listing on the OTC market, according to the GRETAI Securities Market, which operates the OTC market.
In March, Chinatrust Commercial Bank (中國信託商銀) listed 1 billion yuan worth of bonds, while textile maker Far Eastern New Century Corp (遠東新世紀) listed 500 million yuan worth, and motor and home appliance supplier Teco Electric & Machinery Co (東元電機) listed 300 million yuan worth earlier this month.
The sale of yuan-denominated bonds has been allowed in Taiwan since Feb. 6, when a cross-strait currency clearing mechanism was put in place, permitting banks in Taiwan to offer yuan-denominated deposit and loan services.
Chang Hwa’s yuan-denominated “twAA” rated bonds carry a maturity period of three years and a coupon rate of 2.9 percent, it said.
Interest will be paid to investors once a year, the bank said.
The bank is planning to issue an additional 2 billion yuan worth of bonds over a one-year period, with the exact schedule depending on market conditions.
Analysts say the market for yuan-denominated bonds in Taiwan has great growth potential as investors are keen to seek alternative options to yuan deposits.