China has swapped the negotiable certificates of deposit (NCD) issued by the troubled Baoshang Bank for new NCDs guaranteed by official agencies, China's central bank said Wednesday.
A total of 249 holders of NCDs issued by the Baoshang Bank have exchanged the short-term debt instrument with combined face value of 43.59 billion yuan (6.33 billion U.S. dollars), the People's Bank of China (PBOC) said.
The principal and interest on the new NCDs are guaranteed by the PBOC, the China Banking and Insurance Regulatory Commission and the central bank-backed deposit insurance fund management company, the PBOC said, adding that the new NCDs had started trading Wednesday.
China took over the Inner Mongolia-based Baoshang Bank in May citing serious credit risks.
The swap of the NCDs can help protect the interest of debt holders and improve market liquidity of NCDs, according to the central bank.