BEIJING, Nov. 28 (Xinhua) -- China Development Bank (CDB), a development financial institution, issued its first floating-rate bonds (FRB) based on loan prime rate (LPR) in the inter-bank market Thursday.
The bonds are benchmarked on the one-year LPR and bear a maturity of two years, with the offering scale at no more than 3 billion yuan (about 426 million U.S. dollars).
Dutch bidding will be adopted for the bond offerings.
An FRB is a debt instrument with a variable interest rate that is tied to a benchmark reference rate plus an additional credit spread.
China's central bank in August announced a plan to reform the LPR mechanism to better reflect market changes in its latest move to guide borrowing costs lower to support the real economy.
Under the revamped mechanism, the LPRs, released on the 20th day of each month, are based on rates of the central bank's open market operations, especially the medium-term lending facility rates.
China's latest one-year LPR came in at 4.15 percent on Nov. 20, down from 4.2 percent a month earlier, according to the National Interbank Funding Center.