Template:Chinese A Formosa bond is a bond issued in Taiwan but denominated in a currency other than the New Taiwan Dollar. They are issued by the Taiwan branches of publicly traded overseas financial institutions and to be traded must have a credit rating of BBB or higher.
The name refers to Formosa, an alternative name for the island of Taiwan; it was chosen as the result of a contest held in September 2006 by the FSC. 15 names were suggested, intended to reflect special characteristics of Taiwan; two different Chinese-language versions of the name "Formosa bond" were suggested, as well as "C-Wang Bond" and "High-Tech Island Bond". Participants were also invited to suggest their own names for the bonds. The result of the contest was announced on 25 September 2006; "Formosa Bond" was the most popular choice, with 5,776 votes, or 57.16% of the total cast; the second-most popular choice, Taiwan 101 Bond, had only 1,229 votes, and the third-most popular choice, an alternative Chinese translation of "Formosa Bond", garnered only 618 votes.
Bonds to be traded 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, for which trading hours are between 9:00 AM and 1:30 PM. However, Formosa bonds also listed on overseas exchanges may be traded over-the-counter between bond dealers.
The first Formosa bonds were part of a US$250 million carried out by Deutsche Bank in November 2006; BNP Paribas followed with an Australian dollar issuance, initially planned at A$500 million (US$386 million at then-current exchange rates) for February 2007, but later reduced to A$308 million (US$258 million) and delayed until 10 April 2007. HSBC were also said to be considering issuing such a bond, and BNP Paribas suggested that they might regularly issue Formosa Bonds.
Presently, only Taiwan branches of publicly traded overseas financial institutions are permitted to issue Formosa Bonds; the market regulator has floated the idea of extending this permission to other branches and subsidiaries of such institutions as well.
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- Yang, Ling-wen (2006-09-11). "櫃買中心債券國際板10月上路 命名活動烈展開 (GTSM bond market international board to open in October; naming contest to be held)". Eastern Television. http://news.yam.com/ettoday/fn/200609/20060911304090.html. Retrieved 2007-07-04.
- "外幣計價國際債券將命名為「福爾摩莎債券Formosa Bond」(Foreign currency-denominated bonds to be called "Formosa bonds")". Yahoo! Taiwan. 2006-10-30. http://tw.stock.yahoo.com/news_content/url/d/a/061030/3/5wc1.html. Retrieved 2007-07-04.
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- Chung, Amber (2007-03-23). "Formosa Bond could be opened to foreign issuers". Taipei Times. http://www.taipeitimes.com/News/biz/archives/2007/03/23/2003353525. Retrieved 2007-07-04.