The first 1.5 billion yuan tranche of Expo bonds will be on sale on December 28 in Beijing, Shanghai and Shenzhen. China’s State Council, the country’s cabinet, and the National Development and Reform Commission (NDRC), the country’s macroeconomic policy maker, have approved the issuance of bonds totaling eight billion yuan to fund the construction of the 2010 World Expo.

At the inauguration ceremony for the issuance of the first tranche on December 26, Mr. Zhou Yupeng, vice mayor of Shanghai and currently deputy director of the Shanghai Expo Executive Committee and director of the Bureau of Shanghai World Expo Coordination, said proceeds from the bond issuance will be used for the construction of key projects of the World Expo.

He also encouraged financial institutions, companies, and the public to buy the bonds in a bid to show their support for the infrastructure construction of the World Expo. About 150 people, including officials from the NDRC and the Shanghai municipal government were present at the inaugural ceremony.

Mr. Zhou also said that the Expo 2010 Shanghai will be the first comprehensive exposition to be held in a developing country in the history of the World Expo, and it is also a global event undertaken by the Shanghai municipal government and the Chinese central government. The approval of the registration report of the Shanghai Expo on December 1 this year signified that it is the right time for the city to extend invitations to businesses, investors and exhibitors. The relocation for 2006 of residents and companies located in the World Expo area has been largely finished; there will be a new round of constructions, and the construction of key projects for the World Expo is the kernel for the whole World Expo event, and a key to the accomplishment of the planned target of the World Expo. The issuance of the World Expo bonds provides a new financing channel for the World Expo, including the infrastructure, stadiums and other projects, and the issuance of the bonds will help ensure the construction will go ahead as planned previously.

Mr. Zhang Dongsheng, director of the Fiscal and Finance Bureau under NDRC said that the issuance of corporate bonds will be a positive try in financing large-scale international event hosted by the country, and will actively propel the construction of key projects of the 2010 Shanghai World Expo that are invested by the Shanghai World Expo Group.

It is learned that the World Expo bonds, issued by enterprises and backed by the government, will be totaling eight billion yuan and be issued in several batches. The bonds will be issued either by the Shanghai World Expo Land Holding Co and or the Shanghai World Expo Group. The first tranche 1.5 billion bonds was issued by the Shanghai World Expo Group, with the remaining 6.5 billion bonds to be gradually issued by the two companies in accordance with the financing needs of the Expo Park construction. The first tranche of bonds will mature in seven years, with an annual fixed interest rate of four percent. The Shanghai Branch of the Industrial and Commercial Bank of China has provided an irrevocable guarantee for the first batch of bonds, which are rated as“AAA”by the Shanghai New Century Credit Rating Investor Service Co. Meanwhile, the bonds will be sold at retail outlets of the underwriting syndicates in Beijing, Shanghai and Shenzhen. The lead underwriter for the first tranche of expo bonds is Guotai Jun’an Securities Co.

As the head of the first enterprise to issue the World Expo bonds, Mr. Dai Liu, president of the board of directors of Shanghai World Expo (Group) Co., Ltd. said at the inaugural ceremony that his company and its affiliated companies have invested 370 million yuan to set up the Shanghai World Expo Operating Co.，Ltd. in accordance with guidance from the CPC Committee of Shanghai city and the Shanghai municipal government and in a bid to beef up preparatory efforts and to perfect the organizational structure. The newly founded non-profit unit will be responsible for the operational affairs related to the Shanghai World Expo, and implement Expo-related operational tasks formulated by the Bureau of Shanghai World Expo Coordination in accordance with the schedules for the preparation for the World Expo. These tasks include the management of the World Expo area, pavilions, and stadiums, logistics, property management, security issues, traffic coordination, communications and IT services, operation of facilities located in the World Expo area, management of relevant activities, services provided for exhibitors and visitors, management of World Expo brands, ticket service, convention services, and services related to foreign affairs, translation and receptions as well as other tasks given by the Bureau of the Shanghai World Expo Coordination.

Meanwhile, the major duties of the World Expo Group will be: raising funds from sources other than government for the World Expo as entrusted by the organizers of the 2010 Shanghai World Expo; construction of pubic facilities including the theme pavilion, convention center, performance center; construction and management of the World Expo village; construction of service facilities in the World Expo area; provision of HR resources and services related to the construction of pavilions and the arrangement of exhibitions; provision of necessary non-monopoly HR resources related to the pavilion construction and arrangement of exhibitions for participants in line with their requests and in light with market rules. Mr. Dai said the Shanghai World Expo Group will, via the issuance of the expo bonds and the establishment of the operating unit, continue to center upon the development strategy of“running a successful, splendid and unforgettable World Expo and building a first-rate flagship modern service company”. It will also operate simultaneously on the fronts of World Expo preparation and corporate management, meaning that the company will be actively involved with various work related to the World Expo while endeavoring to build up modern services brands for the Group and to boost the core competitiveness of the Group.

(Written by Dai Qian)