Continuing its capital-raising streak, Chinese state-owned conglomerate, China Film Group Corporation, has issued $67.7m (RMB500m) in corporate bonds to finance digital film production and cinemas.

The seven-year bonds have a fixed annual coupon rate of 6.1% and are available to domestic institutional investors. China Merchants Securities is the lead underwriter.

The fund financed through the bonds will be spent on China Film's National Digital Film Production Base, which is currently being built in the Beijing suburb of Huairou, and on new digital cinemas.

The digital production base requires total investment of $123m (RMB908m) and China Film also aims to increase the number of digital screens to 1,000 by the end of 2008, which requires funds of $54m (RMB400m). Funds of around $95m (RMB700m) will also be spent on building new cinemas and upgrading existing ones.

China Film, which is by far China 's largest film producer and distributor, is the first Chinese culture and media enterprise approved to issue corporate bonds. The move follows China Film Group chairman Han San Ping's announcement earlier this year that the conglomerate would list on the Chinese stock market in 2008.

The digital production base, covering an area of 34 hectares, has been under construction since early 2006. When completed, it will feature 16 sound stages, one of which is 5,000 square metres, in addition to post-production, wardrobes and props, and optical disc manufacturing facilities.