The China Development Bank is to issue financial bonds totaling US$500 million through the interbank market on Friday, announced a spokesman for the bank Tuesday.

This will be the first domestic foreign exchange bond issued by a Chinese financial institution, opening a new channel for state-owned enterprises to collect foreign currencies on the domestic market, said industrial insiders.

The bank will use the money to support state-owned enterprises in debt restructuring, lowering financing costs and handling the existing high-cost foreign debts, the spokesman said.

Buyers of the bond, bearing fixed interest rates with a term of five years, are restricted to Chinese-funded financial institutions approved to handle foreign exchange business in the country's interbank markets.

The China Development Bank, one of the country's three policy banks, collects money for key projects in the fields of infrastructure facilities, basic industries, pillar industries and high and new technological sectors. It is also a body for bond issuing, second only to the Ministry of Finance.

The issued a total of US$1.2 billion of bonds in the international market in 1996, 1997 and 1999, which were widely received.

(Xinhua News Agency September 17, 2003)