China Yuchai International Ltd Announces Issuance of Short-Term Financing Bonds by Key Subsidiary

China Yuchai International Ltd announced that its key subsidiary, Guangxi Yuchai Machinery Company Limited (GYMCL) has received approval from China's National Association of Financial Market Institutional Investors ("NAFMII") for the issuance of RMB-denominated, unsecured, short-term financing bonds (Bonds) amounting to RMB1 billion. The Bonds will be issued on August 28, 2012 and mature on August 29, 2013. The par value and issue price of each Bond is RMB 100. The Bonds will bear a fixed annual interest rate of 4.45%. Subscription to and trading of the Bonds is only available in China to institutional investors of China's National Inter-bank Bond Market. The lead underwriter and bookrunner for the Bonds is the Industrial and Commercial Bank of China. The proceeds from the issuance of the Bonds are to be used by GYMCL for working capital purposes. GYMCL decided on the Bonds issue as it is a cost effective option of raising capital in the current monetary market. China's benchmark one-year lending rate is at 6% and the prevailing discount rate for bank bills is higher than the fixed annual interest rate of the Bonds. This Bonds issuance is in addition to the RMB 690 million short-term financing bonds issued by GYMCL on November 22, 2011. GYMCL will continue to review its financing strategy according to changes in China's economic environment and monetary policy.