China Construction Bank Plans $5.9 Billion Bond Sales
China Construction Bank Corp., the nation’s second largest lender, plans to sell as much as 40 billion yuan ($5.9 billion) of subordinated bonds to replenish capital and strengthen its risk-management capability.
Beijing-based China Construction will sell 15 billion yuan of 10-year bonds and 15 billion yuan of 15-year bonds on China’s interbank market between Feb. 24 and March 2, it said in a statement today. The bank has an option to increase the sale by 10 billion yuan if there’s sufficient investor demand, it said.
China is urging domestic lenders to bolster capital and guard against credit risks as the economy cools. The nation’s banks will need 1.23 trillion yuan of additional funds after a regulator told publicly traded lenders to raise their capital adequacy ratios to 12 percent this year, according to UBS AG.
The average capital adequacy ratio at Chinese banks climbed to 8.4 percent in 2007, according to the latest available data.
China Construction plans to sell 80 billion yuan of subordinated bonds over the next two years, it said on Jan. 16. The sales are subject to shareholder and regulatory approvals.