BOC鈥檚 US$6.5b deal to meet Basel III
Print Edition
THE Bank of China yesterday sold US$6.5 billion in contingent capital, launching a critical wave of fundraising by China’s biggest banks as they boost their balance sheets to meet new global bank capital rules.
It is the first time a Chinese bank has issued so-called additional Tier 1 preference shares, instruments which behave like bonds and turn into common equity if the bank’s core capital falls below certain trigger ratios.
It is also the world’s largest-ever contingent capital deal, beating a US$5.6 billion deal by HSBC in September.
As growth slows and bad debts build up, China’s banks are rushing to replenish their balance sheets to meet the tough new global bank capital regulations known as Basel III.
This deal follows a wave of similar issuance by European banks earlier this year.
China’s four biggest lenders may issue US$20 billion worth of additional Tier 1 and Tier 2 capital by the end of the year, according to Fitch Ratings.
China has been rigorously enforcing Basel III regulations in its efforts to ward off a financial crisis following a huge run-up in debt since 2008 and a marked slowdown in the economy.
BOC said the preference shares would yield 6.75 percent, within the range expected by investors. Investors in these kind of preference shares demand a premium over straight bonds from the same issuer, for the extra risk their securities may be turned into common shares in times of stress for the bank.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 娌狪CP璇侊細娌狪CP澶05050403鍙-1
- |
- 浜掕仈缃戞柊闂讳俊鎭湇鍔¤鍙瘉锛31120180004
- |
- 缃戠粶瑙嗗惉璁稿彲璇侊細0909346
- |
- 骞挎挱鐢佃鑺傜洰鍒朵綔璁稿彲璇侊細娌瓧绗354鍙
- |
- 澧炲肩數淇′笟鍔＄粡钀ヨ鍙瘉锛氭勃B2-20120012
Copyright 漏 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
