The Ministry of Finance (MOF) has announced its plan to issue Exchangeable Government Bonds by the end of first quarter 2004. The first offer will be approximately NTD 30-40 billion (USD 880 million to USD 1.2 billion) with a tenor of 2-3 years, and exchange procedures will be similar to those issued by corporates.
The underlying stocks targeted are government owned blue chips e.g. China Steel, Chung Hwa Telecom and etc. This new type of government bond will provide investors with a fixed return on bonds, an option to exchange them into the underlying stocks based on the terms and conditions defined, as well as provide an alternative investment instrument for investors that is expected to help boost the government bond market. It is not yet confirmed whether foreign investors can invest in Exchangeable Government Bonds.