Shangahi-listed CITIC Securities Co Ltd, China's largest brokerage by market value, plans to issue a raft of fixed-interest debt instruments on the Chinese mainland and in overseas markets to raise a total of 40 billion yuan ($6.4 billion) with terms no longer than 10 years.

These instruments will include corporate bonds, subordinated bonds, structured notes, commercial bills and other debt papers permitted by regulatory authorities, according to the company's statement to the Shanghai Stock Exchange on Monday.

CITIC Securities said proceeds from the bond sales will be used to meet the demands of the company's operation and supplement its cash liquidity and investment projects.

The total amount of capital CITIC said it plans to raise will be larger than the combined total of all the debt instruments issued by all other brokerage firms in 2012.

The terms of each of the onshore and offshore corporate debt financing instruments will be no longer than 10 years, according to the brokerage.

CITIC Securities also proposed the establishment of wholly owned offshore subsidiaries in Hong Kong or other overseas markets.

On Tuesday, Shanghai-listed CITIC Securities saw a 0.22 percent drop in its share price, which closed at 13.77 yuan per share.

Several other brokerages announced fund-raising through the issuance of bonds since the beginning of 2013, raising a total of 16.6 billion yuan.

In 2012, securities companies in China saw a re-financing of 70 billion yuan, according to statistics from Wind Information Co Ltd, a financial information service provider.

"Refinancing will help cash liquidity and enhance profit in the short term. It is also necessary to look closely at the long-term pressure after the money is raised and how it can effect the profit growth of the brokerages in the long term," said Hu Xiaomin, analyst with Shanghai Shenyu Investment Co Ltd.

China Securities Finance Corp Ltd signed contracts with 22 securities companies in a pilot program for refinancing with total credit limits of more than 15 billion yuan, the Securities Times reported on Tuesday.

As many as 52 securities companies, or some 70 percent of companies with a securities margin trading business had joined the pilot program by Tuesday.

wuyiyao@chinadaily.com.cn

(China Daily 01/23/2013 page15)