Formosa Bond Overview and Investment Opportunities

Formosa bonds are a type of bond issued by Taiwanese companies, offering a unique investment opportunity for foreign investors.

These bonds are typically denominated in US dollars, making them attractive to international investors seeking a relatively stable and liquid investment.

Formosa bonds are usually issued with a fixed coupon rate and a maturity period ranging from 5 to 30 years, providing a predictable income stream for investors.

Taiwanese companies issue Formosa bonds to raise capital for various purposes, such as refinancing existing debt, funding new projects, or expanding their business operations.

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The Formosa bond is a type of bond that was designed and promoted by Lee Shyan-yuan, a board member of Taiwan's market regulator, the Financial Supervisory Commission (FSC).

The name "Formosa" is an alternative name for the island of Taiwan, and it was chosen as the result of a contest held by the FSC in 2006.

This contest was open to the public, and participants were invited to suggest their own names for the bonds, as well as the name "Formosa Bond" itself.

The most popular choice among the suggested names was indeed "Formosa Bond", which received 5,776 votes, or 57.16% of the total cast.

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Formosa bonds can be traded between 9:00 AM and 1:30 PM through the GreTai Securities Market's Electronic Bond Trading System.

To trade, bonds must have a credit rating of BBB or higher. Trading between securities firms has to be carried out through a subsystem of the GreTai Securities Market's Electronic Bond Trading System.

Formosa bonds can also be traded over-the-counter between bond dealers for bonds listed on overseas exchanges. This flexibility allows for more efficient trading.

Here are some key features of Formosa bonds:

Trading Formosa bonds can be a bit tricky, but let's break it down. To trade bonds, they must have a credit rating of BBB or higher.

The trading process for Formosa bonds is quite specific. It has to be carried out through a subsystem of the GreTai Securities Market's Electronic Bond Trading System, which operates between 9:00 AM and 1:30 PM.

However, there's a catch - Formosa bonds listed on overseas exchanges can be traded over-the-counter between bond dealers.

The first Formosa bonds were issued in November 2006 by Deutsche Bank, with a total value of US$250 million.

BNP Paribas followed suit in April 2007, issuing a Formosa bond worth A$308 million (US$258 million).

Presently, only Taiwan branches of publicly traded overseas financial institutions are allowed to issue Formosa bonds.

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The instrument in question carries a coupon rate of 2.49 per cent. This is a relatively low rate, but it's likely attractive to investors seeking stable returns.

The coupon rate is a key feature of the instrument, as it determines the interest rate paid to investors. It's a crucial consideration for anyone looking to invest in this type of bond.

The coupon rate of 2.49 per cent is a competitive rate, especially for a 5-year public issuance by an Indian financial institution. This suggests that the issuer, SBI, has a strong reputation and a loyal investor base.

This low coupon rate may also indicate that the issuer is confident in its ability to service the debt and make timely payments to investors.

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Crédit Agricole CIB was the bookrunner for Chile's first-ever sustainable bond, a 5-year peso-denominated bond with a 2.5% coupon.

This pioneering bond was issued by the Chilean government to finance environmentally friendly projects.

The bond was priced at par with a 2.5% coupon, and it was listed on the Santiago Stock Exchange.

Crédit Agricole CIB's expertise in sustainable finance helped make this bond a success, paving the way for future sustainable bond issuances in Chile.

The bond's proceeds will be used to fund projects that promote renewable energy, energy efficiency, and sustainable water management.

The Chilean government's commitment to sustainable development is reflected in its goal to reduce greenhouse gas emissions by 30% by 2030.

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Formosa bonds are a type of Chinese bond issued by Taiwanese companies.

The first Formosa bond was issued in 1989 by the Taiwan-based oil refiner Formosa Plastics.

Formosa bonds are typically denominated in US dollars and have a relatively high yield compared to other types of bonds.

They are often used by Taiwanese companies to raise capital for expansion or refinancing purposes.

The Formosa bond market has grown significantly since its inception, with many Taiwanese companies issuing bonds on the international market.

Taiwanese companies can issue Formosa bonds to tap into the global capital market, which can provide them with more funding options.

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