On July 2, CIB successfully launched the market’s first asset-backed debt financing instruments for private enterprises. These include the 2024 first issue of asset-backed debt financing instruments for Jointown Pharmaceutical Group Co., Ltd. and the 2024 first issue of asset-backed debt financing instruments (Sci-tech Bond) for Kelun Pharmaceutical Co., Ltd. These instruments will further aid private enterprises in revitalizing existing assets and reducing financing costs, thereby supporting the stable and healthy development of the private economy.
It is reported that the issuer, Jointown Pharmaceutical Group Co., Ltd., is the largest private pharmaceutical commercial enterprise in China, while Kelun Pharmaceutical Co., Ltd. is a leading enterprise in the large infusion industry and a nationally recognized high-tech enterprise.
Asset-backed debt financing instruments are financing tools where the issuer offers collateral using assets or asset pools to achieve financing purposes. These instruments can specify that the cash flows generated by the issuer or the assets support the income, thereby positioning them as structured financing tools with “dual recourse” to both assets and the entity. This approach helps enterprises activate dormant real estate, land use rights, equity, and other various assets. On August 30, 2023, the National Association of Financial Market Institutional Investors issued a Notice to Further Increase Support for Debt Financing Instruments and Promote the Healthy Development of the Private Economy. The Notice encourages private enterprises to register and issue asset-backed debt financing instruments in line with market-oriented and legal principles, fully leveraging the “dual credit enhancement” mechanism of assets and entities to revitalize existing assets.
“The bond market plays a crucial role in financing private enterprises. Asset-backed debt financing tools enhance credit and expand the financing capacity of private enterprises by using asset guarantees. This not only improves the efficiency of asset utilization but also broadens the financing channels for private enterprises, stimulates market vitality, and boosts confidence in the development of the private economy,” said a relevant person in charge from CIB’s Investment Banking Department.
In recent years, CIB has adhered to the principles of “two unwavering principles,” and "equal treatment" to support the development and growth of the private economy. The bank has continuously enhanced its reputation as an “Investment Bank,” and streamlined bond financing channels for private enterprises. The scale of non-financial debt underwriting has consistently remained at the forefront of the market. As of June 30, CIB had underwritten a total of 395.05 billion RMB in non-financial enterprise debt financing instruments, including 15.182 billion RMB for private enterprises.