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ABC New York Branch Successfully Issued First US Commercial Paper

Recently, ABC New York branch became the first Chinese bank in the United States which successfully established a U.S. commercial paper program. Investors reacted enthusiastically in the starting date with a total issuing amount of $261 million, and maturity ranged from one week to six months. The commercial papers’ issue interest rates are also generally lower than inter-bank offered rate as a whole.

The successful issuance of commercial paper of ABC New York, following the launch of the New York branch’s Yankee CD and establishment of bond repurchase business channels, is another important step in terms of liquidity management, which can help New York branch to achieve diversified funding sources, reduce branch funding costs, enhance the ability to respond to market changes, and lay a good foundation of funding sources for the future branch development. Meanwhile, the successful issuance of US commercial paper has expanded the influence of Agricultural Bank of China in New York local financial market and the international financial market, providing richer set of financing tools for Agricultural Bank of China in the global market.

Commercial paper is an important part of U.S. short-term funding markets, with current market size of over one trillion U.S. dollars, and it is an important tool for U.S. financial institutions and enterprises to raise short-term funds and optimize liquidity management. Compared to certificates of deposit (CD), commercial paper market has larger capacity, more active secondary market, and better liquidity. The wide range of active buyers of commercial paper in the United States include not only commercial banks, but money market funds , pension funds, insurance companies, government agencies and non-financial companies.