September 27, RMB 4 billion hybrid capital bond of 15-year term was successfully issued by Industrial Bank in national inter-bank bond market. With this act, Industrial Bank jumped to be the first domestic commercial bank that issued hybrid capital bond with the approval of People's Bank of China and China Banking Regulatory Commission. The move has witnessed again Industrial Bank's new breakthrough in innovative way for capital supplement since its issuance of fixed-term subordinate debt and subordinate debt at the end of 2003 and 2004 respectively.
Offering categories of both fixed and floating interest rate, in which fixed interest rate category amounted to RMB 3 billion and floating interest rate category totaled RMB 1 billion, the bond was issued through the mode of booking building and centralized placing. According to the record of booking building, the subscription amount of fixed interest rate category hit RMB 5.175 billion, the over-subscription achieved 1.725 times and the face interest rate ended at 4.94%; the subscription amount of floating interest rate category totaled RMB 1.905 billion, the over-subscription achieved 1.905 times and the face interest rate was set to be the sum of one-year fixed deposit interest rate plus basic margin 1.8%.
Designed in line with the regulation of Basel Accord and referring to common international practice of hybrid capital bond instrument, the hybrid capital bond is a long-term bond that bore the features of upper tier 2 capital. From the aspect of property, the bond possesses the characteristics of both share capital and bond; from the aspect of issuer, the bond can be accounted into supplementary capital because of its certain features from share capital; and form the aspect of bondholder (creditor), the bond is a special bond that the issuer should pay the interest rate and return the principal according to the bond contract.