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China Pacific completes first debt project financing product
By Zhang Fengming |
July 24, 2009, Friday
|
Online Edition
Online Edition
CHINA Pacific Insurance (Group) Co has finished the first debt project financing product in China as regulators opens door for insurers to invest in infrastructure projects, the insurer said today.
The 2 billion yuan (US$293 million) project-financing product is for a tunnel that will link Chongming Island to downtown Shanghai. The product bears a life of 10 years.
The insurer's assets management arm sold 40 percent of the product to non-related third parties, or other insurance companies, the Shanghai-based insurer said today in a statement.
The insurer itself takes the remaining 60 percent.
"The product was well received by the market," the Shanghai-listed insurer said today. It declined to disclose the interest of the product.
The China Insurance Regulatory Commission issued rules on debt project financing in April. China Pacific Insurance's product was the first to obtain regulatory approval.
China is expanding insurers' investment channels from traditional governmental bonds and bank deposits. Insurers are allowed to invest in infrastructure through debt project financing products via insurance assets management companies. Investment in real estate is also allowed in the new Insurance Law, which will take effect from October 1.
The returns on insurance investment topped 109.97 billion yuan in the first half, better than the year-ago level. The rising stock market has bettered insurers' investment returns, which was hard hit last year amid the equity market rout.
China's stock market is the best performing bourse in the world this year with the benchmark Shanghai Composite Index rising 78 percent.
The 2 billion yuan (US$293 million) project-financing product is for a tunnel that will link Chongming Island to downtown Shanghai. The product bears a life of 10 years.
The insurer's assets management arm sold 40 percent of the product to non-related third parties, or other insurance companies, the Shanghai-based insurer said today in a statement.
The insurer itself takes the remaining 60 percent.
"The product was well received by the market," the Shanghai-listed insurer said today. It declined to disclose the interest of the product.
The China Insurance Regulatory Commission issued rules on debt project financing in April. China Pacific Insurance's product was the first to obtain regulatory approval.
China is expanding insurers' investment channels from traditional governmental bonds and bank deposits. Insurers are allowed to invest in infrastructure through debt project financing products via insurance assets management companies. Investment in real estate is also allowed in the new Insurance Law, which will take effect from October 1.
The returns on insurance investment topped 109.97 billion yuan in the first half, better than the year-ago level. The rising stock market has bettered insurers' investment returns, which was hard hit last year amid the equity market rout.
China's stock market is the best performing bourse in the world this year with the benchmark Shanghai Composite Index rising 78 percent.
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