Obligation British Columbia 2.85% ( XS1132718765 ) en CNY

Société émettrice British Columbia
Prix sur le marché 100 %  ▲ 
Pays  Canada
Code ISIN  XS1132718765 ( en CNY )
Coupon 2.85% par an ( paiement annuel )
Echéance 13/11/2016 - Obligation échue



Prospectus brochure de l'obligation British Columbia XS1132718765 en CNY 2.85%, échue


Montant Minimal 1 000 000 CNY
Montant de l'émission 3 000 000 000 CNY
Description détaillée L'Obligation émise par British Columbia ( Canada ) , en CNY, avec le code ISIN XS1132718765, paye un coupon de 2.85% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 13/11/2016







LISTING MEMORANDUM
13SEP201120000567
CNY 3,000,000,000
PROVINCE OF BRITISH COLUMBIA
(Canada)
2.85% Bonds, Series BCCNY-2, due November 13, 2016
The bonds are offered for sale in Canada, the United States, and those jurisdictions in Europe and Asia
where it is legal to make such offers. The bonds are not offered for sale in the PRC (as defined herein).
The bonds bear interest at the rate of 2.85% per year. Interest on the bonds is payable on May 13 and
November 13 of each year, beginning May 13, 2015. The bonds will mature on November 13, 2016. The bonds are
not redeemable before maturity, unless certain events occur involving Canadian taxation.
Payments in respect of the bonds will be made solely in Renminbi (as defined below) by transfer to a
Renminbi bank account maintained in Hong Kong, except in certain limited circumstances described herein.
Application has been made for the bonds offered by this listing memorandum to be admitted to the Official
List of the Luxembourg Stock Exchange and for such bonds to be admitted to trading on the Euro MTF Market
of the Luxembourg Stock Exchange. This Listing Memorandum (as defined below) and the accompanying Basic
Prospectus (as defined below) constitute a prospectus for the purpose of the Luxembourg Law dated July 10, 2005
on Prospectuses for Securities, as amended. The Euro MTF Market of the Luxembourg Stock Exchange is not a
regulated market for the purposes of the Markets in Financial Investments Directive (Directive 2004/39/EC).
Unless the context otherwise requires, references in this listing memorandum to the bonds being ``listed'' shall
mean that the bonds have been admitted to trading on the Euro MTF Market and have been admitted to the
Official List of the Luxembourg Stock Exchange. We have undertaken to the underwriters to use all reasonable
efforts to have the bonds listed on the Euro MTF Market of the Luxembourg Stock Exchange on or as soon as
possible after the closing of the issue. Settlement of the bonds is not conditional on obtaining the listing. We have
no obligation to maintain the listing on the Luxembourg Stock Exchange.
Investing in the bonds involves risks. See ``Risk Factors'' beginning on page S-8.
Neither the Securities and Exchange Commission (the ``SEC'') nor any other regulatory authority has
approved or disapproved of these securities or passed upon the accuracy or adequacy of this listing memorandum
(the ``Listing Memorandum'') and the accompanying basic prospectus dated June 19, 2012 (the ``Basic
Prospectus''). Any representation to the contrary is a criminal offense.
Per bond
Total
Public Offering Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100.00%
CNY 3,000,000,000
Underwriting Discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.10%
CNY 3,000,000
Proceeds, before expenses, to the Province . . . . . . . . . . . . . . . . . . . . . . . . . . .
99.90%
CNY 2,997,000,000
The bonds have been made ready for delivery in book-entry form only through the facilities of Clearstream
Banking, soci´
et´
e anonyme and Euroclear Bank S.A./N.V., on November 13, 2014.
Bookrunners
Bank of China
HSBC
Co-Managers
RBC Capital Markets
ICBC
The date of this Listing Memorandum is November 20, 2014.


TABLE OF CONTENTS
Page
Listing Memorandum
Summary of the Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-5
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-8
Remittance of Renminbi into and outside the PRC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-12
Exchange Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-14
Description of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-15
Clearing and Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-24
Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-25
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-29
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-34
Authorized Agent in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-34
Forward-looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-34
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-35
Sources of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-35
Basic Prospectus
About This Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Where You Can Find More Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
General Description of Province of British Columbia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Description of Debt Securities and Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Form, Exchange and Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Registered Global Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Payment of Interest and Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
Canadian Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
United States Federal Income Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
United Kingdom Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
Enforceability and Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
Debt Record . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
Authorized Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
Experts and Public Official Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15


Capitalized terms used but not defined herein have the meanings given to them in the Basic
Prospectus.
The words ``the Province,'' ``we,'' ``our,'' ``ours'' and ``us'' refer to the Province of British Columbia.
References in this Listing Memorandum to the European Economic Area and Member States of
the European Economic Area are to the member states of the European Union together with Iceland,
Norway and Liechtenstein.
Unless otherwise specified or the context otherwise requires, references in this Listing
Memorandum to ``Renminbi'' or ``CNY'' are to Renminbi, the official currency of the PRC (as defined
below) eligible for trading outside of the PRC, ``$'' and ``Cdn.$'' are to lawful money of Canada and
``U.S.$'' and ``U.S. dollars'' are to lawful money of the United States of America.
Debt securities denominated in Renminbi, including the bonds, are denominated and settled in
Renminbi deliverable in the Hong Kong Special Administrative Region of the People's Republic of
China (``Hong Kong''), which represents a different market from that of Renminbi deliverable in the
People's Republic of China (excluding Hong Kong, the Macau Special Administrative Region
(``Macau'') and Taiwan, the ``PRC''). Renminbi is a currency that is not currently freely convertible and
conversion of Renminbi through banks in Hong Kong is subject to certain restrictions. Investors in the
bonds should understand the conversion risk in CNY-denominated debt securities. In addition, there is
a liquidity risk associated with CNY-denominated debt securities, especially if such securities do not
have an active secondary market and their prices have large bid/offer spreads. See ``Risk Factors'' on
page S-8 and ``Exchange Rates'' on page S-14.
IMPORTANT INFORMATION FOR INVESTORS
We are not, and the underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. Before making an investment decision, you should
consult your legal and investment advisors regarding any restrictions or concerns that may pertain to
you and your particular jurisdiction.
The Basic Prospectus contains or incorporates by reference information regarding the Province and
other matters, including a description of certain terms of the Province's securities, and should be read
together with this Listing Memorandum. We have not, and the underwriters have not, authorized
anyone to provide any information other than that incorporated by reference or contained in the Basic
Prospectus or this Listing Memorandum or in any free writing prospectus prepared by or on behalf of
us or to which we have referred you. We take no responsibility for, and can provide no assurance as to
the reliability of, any other information that persons other than those authorized by us may give you.
In connection with the issue of the bonds, the underwriters (or persons acting on their behalf) may
over-allot bonds or effect transactions with a view to supporting the market price of the bonds at a
level higher than that which might otherwise prevail. However, there is no assurance that the
underwriters (or persons acting on their behalf) will undertake stabilization action. Any stabilization
action may begin on or after the date on which adequate public disclosure of the terms of the offer of
the bonds is made and, if begun, may be ended at any time, but it must end no later than the earlier of
30 days after the issue date of the bonds and 60 days after the date of the allotment of the bonds. Any
stabilization action or over-allotment must be conducted by the underwriters (or persons acting on their
behalf) in accordance with all applicable laws and rules.
The delivery of the bonds has been made against payment therefor on the date specified on the
cover page of this Listing Memorandum, which is eleven business days following the date of pricing of
the bonds (such settlement cycle being herein referred to as ``T+11''). You should note that the trading
S-2


of the bonds on the date of pricing or the next seven succeeding business days may be affected by the
T+11 settlement. See ``Underwriting.''
The bonds may not be a suitable investment for all investors
Each potential investor in the bonds must determine the suitability of that investment in light of its
own circumstances. In particular, each potential investor should:
(i) have sufficient knowledge and experience to make a meaningful evaluation of the bonds, the
merits and risks of investing in the bonds and the information contained or incorporated by
reference in the Basic Prospectus and this Listing Memorandum;
(ii) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its
particular financial situation, an investment in the bonds and the impact the bonds will have
on its overall investment portfolio;
(iii) have sufficient financial resources and liquidity to bear all of the risks of an investment in the
bonds, including where the currency for principal or interest payments is different from the
potential investor's currency;
(iv) understand thoroughly the terms of the bonds and be familiar with the behaviour of any
relevant indices and financial markets; and
(v) be able to evaluate (either alone or with the help of a financial advisor) possible scenarios for
economic, interest rate and other factors that may affect its investment and its ability to bear
the applicable risks.
Legal investment considerations may restrict investments in the bonds
The investment activities of certain investors are subject to legal investment laws and regulations,
or review or regulation by certain authorities. Each potential investor should consult its legal advisors
to determine whether and to what extent (1) the bonds are legal investments for it, (2) the bonds can
be used as collateral for various types of borrowing and (3) other restrictions apply to its purchase or
pledge of any bonds. Financial institutions should consult their legal advisors or the appropriate
regulators to determine the appropriate treatment of the bonds under any applicable risk-based capital
or similar rules. These restrictions may limit the market for the bonds.
You may assume that the information appearing in this Listing Memorandum and the Basic
Prospectus, as well as the information we previously filed with the SEC and incorporated by reference,
is accurate in all material respects as of the date of such document. Please see ``Where You Can Find
More Information'' in the Basic Prospectus.
We have filed a registration statement with the SEC covering the portion of the bonds to be sold
in the United States or in circumstances where registration of the bonds is required. For further
information about us and the bonds, you should refer to our registration statement and its exhibits.
This Listing Memorandum and the Basic Prospectus summarize material provisions of the agreements
and other documents that you should refer to. Because the Listing Memorandum and the Basic
Prospectus may not contain all of the information that you may find important, you should review the
full text of these documents and the documents incorporated by reference in the Basic Prospectus.
We file reports and other information with the SEC in the United States. You may read and copy
any document we file at the SEC's public reference room in Washington, D.C. Please call the SEC at
1-800-SEC-0330 for more information on the public reference rooms and their copy charges.
Information filed by the Province is also available from the SEC's Electronic Document Gathering and
S-3


Retrieval System (http://www.sec.gov), which is commonly known by the acronym EDGAR, as well as
from commercial document retrieval services.
NOTICES REGARDING OFFERS IN THE EUROPEAN ECONOMIC AREA
If and to the extent that this Listing Memorandum is communicated in, or the offer of the bonds
to which it relates is made in, any Member State of the European Economic Area that has
implemented the Prospectus Directive (2003/71/EC) (and amendments thereto, including Directive
2010/73/EU, to the extent implemented in that Member State and including any relevant implementing
measure in that Member State) (the ``Prospectus Directive''), this Listing Memorandum and the offer
are only addressed to and directed at persons in that Member State who are qualified investors within
the meaning of such Directive (or who are other persons to whom the offer may lawfully be addressed)
and must not be acted upon by other persons in that Member State.
This Listing Memorandum has been prepared on the basis that all offers of bonds in the European
Economic Area will be made pursuant to an exemption under the Prospectus Directive, as
implemented in Member States of the European Economic Area, from the requirement to produce or
publish a prospectus for offers of the bonds. Accordingly, any person making or intending to make any
offer within the European Economic Area of the bonds which are the subject of the placement referred
to in this Listing Memorandum should only do so in circumstances in which no obligation arises for the
Province or the underwriters to produce or publish a prospectus for such offer. Neither the Province
nor the underwriters have authorized, nor do they authorize, the making of any offer of the bonds
through any financial intermediary, other than offers made by the underwriters which constitute the
final placement of the bonds contemplated in this Listing Memorandum.
This Listing Memorandum does not constitute or form part of any offer or invitation to sell these
bonds and is not soliciting any offer to buy these bonds in any jurisdiction where such offer or sale is
not permitted.
S-4


SUMMARY OF THE OFFERING
This summary must be read as an introduction to this Listing Memorandum and the accompanying
Basic Prospectus, and any decision to invest in the bonds should be based on a consideration of such
documents taken as a whole, including the documents incorporated by reference.
Issuer:
The Province of British Columbia.
Aggregate principal amount:
CNY3,000,000,000 (equivalent to approximately U.S.$490,452,524).
Interest rate:
2.85% per year.
Maturity date:
November 13, 2016.
Interest payment dates:
May 13 and November 13 of each year, beginning on May 13, 2015.
Interest commencement:
Interest will accrue from November 13, 2014.
Interest calculations:
Based on a 365-day year and the actual number of days elapsed
(without taking into account any 366-day year).
Currency of payment:
All payments of principal of and interest on the bonds, including any
payments made upon any redemption of any bonds, will be made in
Renminbi, except in the case of illiquidity, inconvertibility or
non-transferability. If we are not able to satisfy payments of principal
or interest, in whole or in part, in respect of the bonds when due in
Renminbi in Hong Kong, for reasons of illiquidity, inconvertibility or
non-transferability, we will, on giving not less than five nor more
than 30 business days' irrevocable notice to the registered holders of
the bonds prior to the due date for payment, settle any such
payment, in whole or in part, in U.S. dollars on the due date at the
U.S. dollar equivalent of any such CNY-denominated amount. See
``Description of Bonds--Payment of U.S. Dollar Equivalent'' in this
Listing Memorandum.
Ranking:
The bonds will be direct and unconditional general obligations of the
Province and will rank equally with all of our other unsecured and
unsubordinated indebtedness.
Redemption:
We may not redeem the bonds prior to maturity, unless certain
events occur involving Canadian taxation.
Proceeds:
After deducting the underwriting discount, our estimated expenses of
CNY705,000 (equivalent to approximately U.S.$115,256), and
CNY820,500 (equivalent to approximately U.S.$134,139) in respect of
certain expenses of the underwriters, our net proceeds will be
approximately CNY2,995,474,500 (equivalent to approximately
U.S.$489,712,677).
Markets:
The bonds are offered for sale in Canada, the United States, and
those jurisdictions in Europe and Asia where it is legal to make such
offers. The bonds are not offered for sale in the PRC.
S-5


Listing:
We have applied to have the bonds admitted to trading on the Euro
MTF Market of the Luxembourg Stock Exchange. We have
undertaken to the underwriters to use all reasonable efforts to have
the bonds admitted to the Official List of the Luxembourg Stock
Exchange and to trading on the Luxembourg Stock Exchange's
Euro MTF Market on or as soon as possible after the closing of the
issue. Settlement of the bonds is not conditional on obtaining the
listing.
Form of bond:
The bonds will be issued in the form of one fully registered global
bond held in the name of the nominee of The Bank of New York
Mellon, as common depositary (the ``common depositary'') for
Clearstream Banking, soci´
et´
e anonyme (``Clearstream'') and
Euroclear Bank S.A./N.V. (``Euroclear''), and will be recorded in a
register held by The Bank of New York Mellon, as fiscal agent,
registrar, transfer agent and principal paying agent of the Province
for the bonds (the ``fiscal agent''). References to ``Euroclear'' and
``Clearstream'' include reference to any successor clearing system and
references to the ``common depositary'' and the ``fiscal agent'' include
any successor acting in those respective capacities. Beneficial interests
in the global bond will be represented through book-entry accounts
of financial institutions acting on behalf of beneficial owners as direct
and indirect participants in Euroclear and Clearstream. Investors may
elect to hold interests in the global bond through any of Clearstream
or Euroclear, if they are participants of such systems, or indirectly
through organizations which are participants in such systems.
Except in limited circumstances, investors will not be entitled to have
bonds registered in their names, will not receive or be entitled to
receive bonds in definitive form and will not be considered registered
holders thereof under the fiscal agency agreement between the
Province and the fiscal agent, relating to the bonds.
The bonds will only be sold in minimum aggregate principal amounts
of CNY1,000,000 and integral multiples of CNY10,000 for amounts
in excess of CNY1,000,000.
Withholding tax:
Principal of and interest on the bonds are payable by the Province
without withholding or deduction for Canadian withholding taxes to
the extent set forth herein.
Risk factors:
We believe that the following factors represent the principal risks
inherent in investing in the bonds: Renminbi is not a freely
convertible currency, and there are significant restrictions on
remittance of Renminbi into and outside the PRC; the limited
availability of Renminbi outside the PRC may affect the liquidity of
the bonds and our ability to source Renminbi to make payments in
respect of the bonds; an investment in the bonds will be subject to
exchange rate risks; an investment in the bonds is subject to interest
rate risks; payments in respect of the bonds will be made solely by
transfer to a Renminbi bank account maintained in Hong Kong,
except in limited circumstances; there is no active trading market for
S-6


the bonds and an active trading market may not develop; the bonds
are subject to modification and waiver of conditions in certain
circumstances; because the global bond is held by the common
depositary or its nominee for Clearstream and Euroclear, investors
will have to rely on Clearstream's and/or Euroclear's procedures for
transfer, payment and communication with us; interest payments may
be subject to withholding tax in certain jurisdictions; the laws
governing the bonds may change; and we have ongoing normal
course business relationships with certain of the underwriters and
their affiliates that could create the potential for, or perception of,
conflict among the interests of underwriters and prospective
investors.
The Province may be contacted at the Ministry of Finance, Provincial Treasury, Debt Management
Branch, P.O. Box 9423 Stn. Prov. Govt., 620 Superior Street, Victoria, British Columbia, Canada
V8W 9V1 and may be telephoned at (250) 387-7125.
S-7


RISK FACTORS
We believe that the following factors may be material for the purpose of assessing the market risks
associated with the bonds and the risks that may affect our ability to fulfill our obligations under the bonds.
We believe that the factors described below represent the principal risks inherent in investing in the
bonds but we do not represent that the statements below regarding the risks of holding any bonds are
exhaustive. Prospective investors should also read the detailed information set out elsewhere in this Listing
Memorandum and the Basic Prospectus (including any documents incorporated by reference herein or
therein) and reach their own views prior to making any investment decision.
Renminbi is not a freely convertible currency, and there are significant restrictions on remittance of Renminbi
into and outside the PRC
Renminbi is not a freely convertible currency at present. The PRC government continues to
regulate conversion between Renminbi and foreign currencies, including the Hong Kong dollar, despite
a reduction in recent years by the PRC government of control over routine foreign exchange
transactions for current account items such as payments for imported goods and salary payments.
Participating banks in Hong Kong have been permitted to engage in the settlement of Renminbi trade
transactions under a pilot program introduced in July 2009. The pilot program was extended in
June 2010 to cover 20 provinces and cities in the PRC and was further extended in August 2011 to
cover all of the PRC and to make Renminbi trade and other current account item settlement available
in all countries worldwide.
In particular, depending on the size and nature of the transaction, a foreign investor is required to
obtain the approval of the Ministry of Commerce of the PRC (``MOFCOM'') and The People's Bank
of China (``PBOC'') or their respective local counterparts for any investment in the PRC using offshore
Renminbi. Such investments include any establishment of a new enterprise, any increase in the
registered capital of an existing enterprise, any acquisition of a PRC onshore entity and any extension
of a loan. In October 2011, MOFCOM promulgated a circular which specifically required the approval
of its head office for certain types of cross-border CNY-denominated direct investment transactions,
including capital contributions of CNY300 million or more and transactions involving certain types of
financial institutions, investment holding enterprises and policy sensitive sectors.
As the relevant PRC regulations and guidelines are relatively new and untested, their
interpretation and application by the relevant PRC authorities remain subject to significant
uncertainties. For further details in respect of the remittance of Renminbi into and outside the PRC,
see ``Remittance of Renminbi into and outside the PRC.''
We cannot assure you that the PRC government will continue to liberalize gradually control over
cross-border Renminbi remittances in the future or that new regulations will not be promulgated which
have the effect of restricting the remittance of Renminbi into or outside the PRC. We will be required
to source Renminbi outside of the PRC to finance our obligations under the bonds, and our ability to
do so will be subject to the overall availability of Renminbi outside the PRC.
The limited availability of Renminbi outside the PRC may affect the liquidity of the bonds and our ability to
source Renminbi to make payments in respect of the bonds
As a result of the restrictions by the PRC government on cross-border Renminbi funds flows, there
are limits on availability of Renminbi outside the PRC. Since February 2004, in accordance with
arrangements between the PRC government and the Hong Kong government, licensed banks in
Hong Kong may offer limited CNY-denominated banking services to Hong Kong residents and
specified business customers. The PBOC has also established a Renminbi clearing and settlement
system for participating banks in Hong Kong. On July 19, 2010, further amendments were made to the
S-8


Settlement Agreement on the Clearing of Renminbi Business (the ``Settlement Agreement'') between
the PBOC and Bank of China (Hong Kong) Limited (``RMB Clearing Bank'') to expand the scope of
Renminbi business for participating banks in Hong Kong. Pursuant to the revised arrangements, all
corporations are allowed to open Renminbi accounts in Hong Kong, there is no longer any limit on the
ability of corporations to convert Renminbi and there is no longer any restriction on the transfer of
Renminbi funds between different accounts in Hong Kong.
However, the current size of Renminbi-denominated financial assets outside the PRC is limited,
and participating banks are required by the Hong Kong Monetary Authority to maintain a total amount
of Renminbi (in the form of cash and its settlement account balance with the RMB Clearing Bank) of
no less than 25% of their Renminbi deposits, which further limits the availability of Renminbi that
participating banks can utilize for conversion services for their customers. Renminbi business
participating banks do not have direct Renminbi liquidity support from the PBOC. The RMB Clearing
Bank only has access to onshore liquidity support from the PBOC to settle open positions of
participating banks for limited types of transactions, including open positions resulting from conversion
services for corporations in relation to cross-border trade settlement and for personal customers of up
to CNY20,000 per person per day. The RMB Clearing Bank is not obligated to settle for participating
banks any open positions resulting from other foreign exchange transactions or conversion services. As
a result, participating banks will need to source Renminbi from the offshore market to settle such open
positions.
Although it is expected that the offshore Renminbi market will continue to grow in depth and size,
its growth is subject to many constraints as a result of PRC laws and regulations on foreign exchange.
We cannot assure you that new PRC regulations will not be promulgated or the Settlement Agreement
will not be terminated or amended in the future, which will have the effect of restricting the availability
of Renminbi offshore. The limited availability of Renminbi outside of the PRC may affect the liquidity
of the bonds. We cannot assure you that we will be able to source Renminbi on satisfactory terms, if at
all, to make payments on the bonds.
An investment in the bonds will be subject to exchange rate risks
The value of Renminbi against the Hong Kong dollar, the U.S. dollar and other currencies
fluctuates and is affected by developments in or affecting the PRC, international political and economic
conditions and many other factors. All payments of interest on and principal of the bonds will be made
in Renminbi, except in the case of inconvertibility, non-transferability or illiquidity. See ``Description of
Bonds--Payment of U.S. Dollar Equivalent.'' As a result, the value of Renminbi payments may vary
with the prevailing exchange rates in the marketplace. If the value of Renminbi depreciates against the
relevant currency, the value of the investment in the relevant currency will have declined.
An investment in the bonds is subject to interest rate risks
The PRC government has gradually liberalized the regulation of interest rates in recent years.
Further liberalization may increase interest rate volatility. The bonds will carry a fixed interest rate.
Consequently, the trading price of the bonds will vary with the fluctuations in the Renminbi interest
rates. If you try to sell your bonds before their maturity, you may receive an offer that is less than your
original investment.
Payments in respect of the bonds will be made solely by transfer to a Renminbi bank account maintained in
Hong Kong, except in limited circumstances
So long as the bonds are represented by a global bond held with the common depositary or its
nominee for Clearstream and Euroclear, all payments in respect of the bonds will be made solely by
transfer to a Renminbi bank account maintained in Hong Kong in accordance with prevailing Euroclear
S-9