China's Ministry of Railways would raise 10 billion yuan (1.4 billion U.S. dollars) in the inter-bank bond market by issuing one-year bills, a ministry spokesman said on Thursday.
The ministry invited tenders for 7.5 billion yuan worth of such bills in the inter-bank market on Thursday, with a bidding yield rate range of 4.65 percent to 4.75 percent, said spokesman Wang Yongping.
The other 2.5 billion yuan worth of bonds would be sold privately. No information on the purchaser was released.
"The capital raised would be mainly used to buy rolling stock and facilitate fund flow in rail construction and operation," said Wang.
Subscriptions from 44 institutions totaled 305 billion yuan, which was 40.7 times the bills' value, a record high in the inter-bank market.
Wang said winners offered the lower limit of the yield rate but he didn't disclose the final result.
It was the first time the ministry had adopted such a debt-financing option since the central bank allowed companies to issue bills with a maturity of one year or less in the inter-bank market in 2005.
By the end of last year, 316 firms had issued 769.3 billion yuan worth of such paper, according to the People's Bank of China.
China plans to extend its total operating railway system to 100,000 kilometers by 2020 from 76,600 km at the end of 2006, which will cost an estimated 2 trillion yuan.
(Xinhua News Agency June 20, 2008)
