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QINGDAO TODAY
在线翻译:
szdaily -> Business/Markets -> 
Risk-hedging tool introduced for bank debt
    2019-06-12  08:53    Shenzhen Daily

THE central bank introduced a credit risk hedging tool Monday for holders of debt issued by Bank of Jinzhou, the latest measure by regulators to calm market jitters about the health of smaller banks.

China’s interbank market has been nervous since regulators seized control of Inner Mongolia-based Baoshang Bank on May 24, citing serious credit risks.

Bank of Jinzhou said last week that its auditor EY had quit before signing off on the bank’s 2018 accounts, after being unable to agree with the bank on the actual usage of some loans.

The new hedging tool for Bank of Jinzhou debt, called Credit Risk Mitigation Warrant (CRMW), is offered to investors in the 2 billion yuan (US$289 million) worth of certificates of deposit (CD) issued by the bank, according to a statement posted on the official website for China’s interbank market. The six-month CD carries a yield of 3.21 percent.

The tool will be funded by The People’s Bank of China, and sold by China Bond Insurance Co. to institutional investors, according to the statement.

Bank of Jinzhou is based in Jinzhou in Liaoning Province.

Regulators’ seizure of Baoshang Bank drove interbank financing costs higher, stirred investor concerns over the health of other regional lenders, and sparked worries about the broader economy.

(SD-Agencies)

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