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China Cinda Asset Management Corporation and China Orient Asset Management Corporation, two of the country's big four asset management companies (AMCs), yesterday announced they had successfully issued the first batch of bad asset backed securities launched on December 11.

The financial offerings, based on the securitization of NPLs, were mainly issued in the inter-bank market for investors to buy as a fixed income investment product. The securities, launched immediately after getting regulatory approval, raised as much as 3.7 billion yuan (US$470 million).

"The launch of the bad-asset backed securities marks the start of a new, advanced investment product," said Mei Baojiu, chief executive of China Orient Asset Management Corporation.

The bad asset backed securities also provides a way for AMCs to dispose of NPLs.

Tian Guoli, chief executive of China Cinda Asset Management Corporation, said that the successful issuing of the securities has linked the bad asset market with the capital market.

According to Zhao Xiaozheng, a managing director with China International Capital Corporation, the securities will be traded in the inter-bank market and all institutional investors in the inter-bank market can buy them.

Insurance companies, however, due to a ban by the China Insurance Regulatory Commission, are not able to buy these kinds of products, according to Zhou Yihong, a manager from China Galaxy Securities.

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