A“International bonds”means securities regulated under the“Taipei Exchange Rules Governing Management of Foreign Currency Denominated International Bonds”.

A“Registered foreign bonds”means the foreign currency denominated bonds registered by qualified bond-dealers under the“Rules Governing the Proprietary Trading of Foreign Bonds by Securities Firms” and approved by the Taipei Exchange.

Please refer to the following laws and regulations:

1. Regulations Governing the Offering and Issuance of Securities by Securities Issuers, Regulations Governing the Offering and Issuance of Securities by Foreign Issuers, and Regulation Governing the Offering and Issuance of Overseas Securities by Issuers.
2. Taiwan Securities Association Self-Regulatory Rules Governing Underwriters’ Guidance in Offering and Issuance Securities for Issuing Companies and Taiwan Securities Association Rules Governing Underwriting and Resale of Securities by Securities Firms.
3. Taipei Exchange Rules Governing Management of Foreign Currency Denominated International Bonds.
4. Operating Rules of the Taiwan Depository & Clearing Corporation (TDCC) and Taiwan Depository and Clearing Corporation Directions for the Handling of Book-Entry Transfer Operations for Foreign Currency Denominated Bonds, and Directions for the Handling of Book-Entry Transfer Operations for Fixed Income Securities.

As per Articles 3 and 5 of the“Taipei Exchange Rules Governing Management of Foreign Currency Denominated International Bonds”, when an issuer applying for trading an international bond, the credit rating of the bond should be BBB or higher:

1. An international organization bond or a straight corporate bond issued by a foreign issuer, as approved by the Financial Supervisory Commission pursuant to Article 22, paragraph 1 of the Securities and Exchange Act.
2. Convertible corporate bonds, overseas convertible corporate bonds, corporate bonds with warrants, and overseas corporate bonds with warrants, offered and issued by a domestic issuer or a TPEx (or TWSE) primary listed company.
3. Convertible corporate bonds and corporate bonds with warrants offered and issued by a foreign issuer that has sponsored the issuance of TWSE listed or TPEx listed Taiwan Depositary Receipts.
4. A financial bond, or overseas financial bond, offered and issued by a domestic financial institution.
5. Straight corporate bonds that are issued offshore by a foreign issuer that is not a TPEx (or TWSE) primary listed company or emerging stock company and that are fully sold by an offshore banking unit or an offshore securities unit located within the territory of the Republic of China (ROC).
6. Overseas convertible corporate bonds and overseas bonds with warrants offered and issued by a foreign issuer that is an emerging stock company.

With the exception of the above international bonds types, the above credit rating criteria will not apply when conform to one of the circumstances below:

1. The bond has been guaranteed by a financial institution within the territory of the ROC.
2. The issuer has provided an issuer credit rating report with a credit rating of BBB or higher.
3. Sale of the bond is restricted to professional investors.

Investors may buy an international bond through a bond underwriter during the issuance period. Investors may also invest in an international bond by trading at a securities firm through negotiation after the international bond circulates in the market. Investors should advise their foreign currency bank account and English names at the trading securities firm to facilitate the receiving of interest payment and principal repayment.

１ Where an issuer engages TDCC to handle book-entry delivery of international bonds that the issuer has registered with a foreign depository, book-entry, or clearing institution, the issuer or its underwriter shall sign an agreement with TDCC, and fill out an Application to Register Bond Issuance Information and Process Principal and Interest Payments and notify TDCC.

２ To register international bonds with TDCC, the issuer shall sign an account opening agreement with TDCC to become a TDCC participant, as a basis for handling the registration of the international bonds and the processing of book-entry delivery.

1. There are two ways of principle and interest payment procedures for international bonds and registered foreign bonds: (1) International bonds (registered and delivered domestically) registered with TDCC which is subject to the bonds with the ISIN Code started with “TW”: If TDCC performs as a principle and interest payment institution, the system will automatically transfer the sum to the foreign currency bank account designated by a domestic or foreign investor on the principal and interest payment date. If TDCC is not the principle and interest payment institution, TDCC will provide the list of bondholders on the principal and interest payment date to the principle and interest payment institution to perform the payment matters. (2) International bonds registered with the foreign depository, book-entry, or clearing institution which is not subject to the bonds with the ISIN Code started with “TW”: In the case where TDCC performs as the receipts and disbursements institution of the international bond, after receiving a principal and interest payment credit notice from a foreign depository, book-entry, or clearing institution, TDCC will transfer the payment to the foreign currency bank accounts which investors designated.
2. Principle and interest payment procedures of registered foreign bonds: The same way as that of the international bonds registered with a foreign depository, book-entry, or clearing institution.

There are two types of fee charges.

1. Issuance.
2. Investment.

Description: (1) TDCC will advance the fee to the foreign depository institution and charge the investors on a monthly basis after receiving the bill from the foreign depository institution. (2) After receiving a principal and interest payment, if the account designated by the investor is under an offshore bank, the fee will be charged in accordance with the remittance service charge of that offshore bank or the foreign currency settlement fee of the third place. (3) With respect to the book-entry service fee for the transactions in secondary markets will be charged in accordance with the“TDCC Rules Governing Charges for Fixed-Income Instruments”. (4) The payment service platform (PSP) refers to the bank signing the“International Bond Payment Handling Agreement”with TDCC to handle the receipts and disbursements of the principal and interest payment which issuers registered with a foreign depository, book-entry, or clearing institution.