China Cinda raised 3 billion yuan (US$38 million) by issuing its bad asset backed securities at an interest rate of 3.8 per cent. China Orient raised 700 million yuan (US$89.3 million) at an interest rate of 3.7 per cent. Both of the two securities have a five-year validity period.

China International Capital Corporation and China Galaxy Securities were respectively the underwriters of the securities issued by China Cinda and China Orient. China Chengxin Credit Management and Dagong Global Credit Rating Co Ltd provided credit ratings respectively.

China's four AMCs were first established in 1999 under a state commission to dispose of the country's massive NPLs due to the banking sector's indiscriminate granting of loans.

The AMC's state missions are to undergo a transformation from wholly state-owned, non-banking financial institutions to private financial firms with an array of offerings.

China Cinda is expected to become the first to transform itself from a bad asset manager to a multi-functional financial group.

The company received approval from the China Securities Regulatory Commission to set up the first AMC-owned securities firm, Cinda Securities, in June.

The securities company is expected to open in the first half of 2007, according to Tian.

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