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Convertible Bonds


2015-03-31

With the approval of the CBRC (Yinjianfu [2010] No.148) and CSRC (Zhengjianxuke [2010] No.723), the Bank issued RMB40 billion A-Share Convertible Bonds on 2 June 2010. With the approval of SSE (Shangzhengfazi [2010] No.17), such Convertible Bonds had been listed on SSE since 18 June 2010.

Upon satisfaction for the first time of conditional redemption provisions of the Convertible Bonds according to the Prospectus of Bank of China Limited on Public Offering of A-Share Convertible Corporate Bonds, and with the approval of CBRC, the Bank redeemed all of the Convertible Bonds registered after the close of the market on 6 March 2015 (the redemption record date). The Convertible Bonds redeemed amounted to RMB25,822,000, representing 0.06% of the total Convertible Bonds (RMB40 billion) issued by the Bank.
Accumulatively 15,240,628,510 A Shares were converted from the Convertible Bonds, representing 5.61% of the total issued ordinary shares of the Bank (271,545,137,605 shares) before the commencement of conversion of the Convertible Bonds (1 December 2010). The Convertible Bonds were delisted from SSE as of 13 March 2015.

For details of the redemption of the Convertible Bonds, please refer to the Bank’s announcements published on the websites of SSE, HKEx and the Bank.

Basic Information of the Convertible Bonds
Securities Name 中行转债
Securities Code 113001
Issue Size RMB 40 billion
Par Value RMB 100
Listing Venue Shanghai Stock Exchange
Listing Date 18 June 2010
Trading Unit 10 notes
Term From 2 June 2010 to 13 March 2015

Previous Adjustments of Conversion Price and Accumulated Conversion

According to the term of "Convertible Bonds conversion price and adjustment" in the prospectus, the Convertible Price is subject to adjustment, upon the occurrence of certain prescribed events which affect the share capital of the Bank, including but not limited to scrip dividend, capitalization issue, issue of new shares, rights issue or cash dividend payment (excluding share issue as a result of conversion of the Convertible Bonds).The initial Conversion Price will be adjusted based on the following formulas: 

(1) Scrip dividend or capitalization issue: P1=P0/(1+n);

(2)Issue of new shares or rights issue: P1=(P0+A×k)/(1+k);

Conditions (1) and (2) occur concurrently: P1=(P0+A×k)/(1+n+k);

(3) Distribution of cash dividend: P1=P0-D;

Conditions (1), (2) and (3) occur concurrently: P1=(P0-D+A×k)/(1+n+k)。

P0: Initial Conversion price,

n: Scrip dividend rate,

k: New share issue rate or rights issue rate,

A: Price of new share issue or rights issue,

D: Cash dividend per Share,

P1: Conversion Price after adjustment

Previous adjustments of conversion price

Effective date of adjusted conversion price Conversion price after adjustment Reasons of adjustments
2 June 2010 RMB4.02 per share Initial conversion price
4 June 2010 RMB3.88 per share 2009 profit distribution
16 November 2010 RMB3.78 per share A Share rights issue
16 December 2010 RMB3.74 per share H Share rights issue
10 June 2011 RMB3.59 per share 2010 profit distribution
13 June 2012 RMB3.44 per share 2011 profit distribution
29 March 2013 RMB2.99 per share Downward adjustment approved by the shareholders
18 June 2013 RMB2.82 per share 2012 profit distribution
27 June 2014 RMB2.62 per share 2013 profit distribution

Interest Payment of the Convertible Bonds

Interest of the Convertible Bonds will be paid annually, beginning from the first day of the issuance of the Convertible Bond. Interest is payable annually commencing on the full year after the issue date of the Convertible Bonds. Interest will be accrued between the period of preceding interest payment date and the next interest payment date. The annual interest record date will be the trading date preceding the interest payment date. The Bank will pay the annual interest within five trading days after the interest payment date.

The annual interest rates of the Convertible Bonds are: the first year 0.5%, the second year 0.8%, the third year 1.1%, the fourth year 1.4%, the five year 1.7% and the sixth year 2.0%.

The information of the interest payment of the Convertible Bonds is as follows:

Payment Period Annual Interest Rate Interest per Board Lot before Tax Interest Record Date Ex-interest Date Interest Payment Date
2 June 2010 - 1 June 2011 0.5% RMB 5 1 June 2011 2 June 2011 9 June 2011
2 June 2011 - 1 June 2012 0.8% RMB 8 1 June 2012 4 June 2012 8 June 2012
2 June 2012 - 1 June 2013 1.1% RMB 11 31 May 2013 3 June 2013 7 June 2013
2 June 2013 - 1 June 2014 1.4% RMB 12.6 30 May 2014 3 June 2014 9 June 2014

Credit Rating of the Convertible Bonds

Dagong Global Credit Rating Co., Ltd. has evaluated the Bank's Convertible Bonds and issued the Credit Rating Report on the Convertible Bonds Issued in 2010 of Bank of China Limited(Da Gong Bao D [2014] No.105), gave an AAA counterparty rating to the Bank and an AAA credit rating to the its Convertible Bonds with a stable outlook.

The Surveillance Credit Rating Reports that Dagong International issued each year are as follows:

Year No. of Surveillance Credit Rating Report Counterparty Rating Convertible Bonds Rating Outlook
2011 Da Gong Bao SD [2011] No.53 AAA AAA stable
2012 Da Gong Bao SD [2012] No.157 AAA AAA stable
2013 Da Gong Bao SD [2013] No.204 AAA AAA stable
2014 Da Gong Bao SD [2014] No.105 AAA AAA stable

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