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Medium term note
 
1. Overview
A medium term note describes a debt financing tool that a non-financial enterprise issues in the inter-bank bond market with the principle and interest repaid within a given period of time.

2. Qualifications for the issuer
An issuer must be a business entity incorporated according to Chinese law that:
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    Has a stable source of funding for debt repayments and is profitable in the last fiscal year;
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    Sustains good liquidity and strong debt-payment capabilities;
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    Utilizes the funding from commercial paper for its own business needs;
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    Has not violated any applicable laws in the past three years;
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    Has not delayed principle and interest repayments on any long-term financing bonds issued over the past three years;
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    Has a healthy internal management mechanism and a complete set of rules on using raised funds;
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    and Other qualifications required by NAFMII.
3. Issue size
The balance of medium term note payable must not exceed 40 percent of the issuer's net asset value.
The issuer can determine the size of each issue within the limit.

4. Term
The term of a medium term note is generally three to five years.

5. Features
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    Once registered, medium term note can be issued multiple times as structured products;
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    With a term of three to five years, the MTN support fiduciary issue without a guarantee or mortgage;
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    Similar to commercial paper, the issue cost of medium term note is low; The underwriting fee accounts for just 3‰ of the total issue value per year;
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    Similar to commercial paper, the balance of medium term note payable can be up to 40 percent of the issuer's net asset value;
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    High level of information transparency: Continuous information disclosure and credit rating enables issuers to build a strong corporate image in the capital market, laying the foundation for sustainable financing.
6. Service description

As agreed with clients, CMB provides a series of value-added specialist services for the issuance of medium term note. These comprise organization, coordination, and supervision services that include client access, due diligence, issue planning, credit management, registration and issuance, and follow-up management.

Underpinned by its strong capital base and rich experience in the bond business, CMB is well-placed to offer high-quality and efficient end-to-end services as the lead underwriter of medium term note.  

7. CMB's advantages

Issuance planning: CMB relies on its team of high-caliber financial advisors to optimally plan for the issuance of medium term note geared to customers' cash flow changes and to ease their repayment burden by designing suitable installments and granting additional credit.

Issue pricing: As a lead bond underwriter, CMB enjoys the industry's strongest pricing power to issue medium term note with a lower interest rate than comparable financing tools, helping customers minimize the issue cost.

Rich experience: CMB has underwritten a number of medium term note as lead manager without standby-commitment underwriting, or issuance delay or failure;

Service team: CMB was the first bank to set up an Investment Banking Department and implement a model of underwriting debt financing instruments involving HQ direct sales and close coordination between the head office and branches. The bank boasts a strong team of experienced and high-caliber professionals. All members of the team have a master's degree or above and extensive experience in investment banking, with two-thirds having studied overseas. CMB's high-quality application materials help shorten the time of approval by NAFMII and facilitate bond registration and issuance.

Note:
All the contents stated above are for your reference only. Please consult the local branch of China Merchants Bank for further information. China Merchants Bank reserves the ultimate right of interpretation for the contents in this page.