CCB to boost capital with US$2.9b bonds
Source: Agencies |
December 11, 2009, Friday
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Print Edition
Print Edition
CHINA Construction Bank is considering issuing about 20 billion yuan (US$2.92 billion) in subordinated bonds to supplement its capital, sources said yesterday.
The nation's second-largest lender plans to complete the issuance of the bonds by the end of this year, an investment banking source told Reuters.
"CCB's business condition is very stable, and the (bonds') issuance should see no problem," the source said.
Citic Securities, Goldman Gaohua, CICC and UBS Securities are the underwriters of the offering, whose maturity is tentatively set at 15 years, said another source, adding that CCB was entitled to redeem them in 10 years.
A CCB spokesman in Beijing was not immediately available for comment.
Chinese banks, under government pressure to shore up their finances after a lending spree since early this year, are set to unleash a wave of billions of dollars in capital raising over the next few years. The total figure is estimated to be as much as 300 billion yuan.
CCB, in which Bank of America has about an 11-percent stake, has issued a total of 60 billion yuan in subordinated bonds so far this year. Its capital adequacy ratio at the end of September was 12.11 percent, down 0.05 percentage point from the end of last year.
Chinese banks must keep their CAR - a key measure of their ability to absorb losses - above 8 percent by law. Small- and mid-sized listed lenders are asked to aim for 10 percent or higher.
The China Banking Regulatory Commission denied last month that it was asking the country's big banks to increase their CAR to 13 percent, but was urging banks that have insufficient capital to come up with plans to strengthen their balance sheets.
The Bank of China, a smaller domestic rival to CCB, last month said it was studying various ways to raise capital but had no plans for now to do so.
The nation's second-largest lender plans to complete the issuance of the bonds by the end of this year, an investment banking source told Reuters.
"CCB's business condition is very stable, and the (bonds') issuance should see no problem," the source said.
Citic Securities, Goldman Gaohua, CICC and UBS Securities are the underwriters of the offering, whose maturity is tentatively set at 15 years, said another source, adding that CCB was entitled to redeem them in 10 years.
A CCB spokesman in Beijing was not immediately available for comment.
Chinese banks, under government pressure to shore up their finances after a lending spree since early this year, are set to unleash a wave of billions of dollars in capital raising over the next few years. The total figure is estimated to be as much as 300 billion yuan.
CCB, in which Bank of America has about an 11-percent stake, has issued a total of 60 billion yuan in subordinated bonds so far this year. Its capital adequacy ratio at the end of September was 12.11 percent, down 0.05 percentage point from the end of last year.
Chinese banks must keep their CAR - a key measure of their ability to absorb losses - above 8 percent by law. Small- and mid-sized listed lenders are asked to aim for 10 percent or higher.
The China Banking Regulatory Commission denied last month that it was asking the country's big banks to increase their CAR to 13 percent, but was urging banks that have insufficient capital to come up with plans to strengthen their balance sheets.
The Bank of China, a smaller domestic rival to CCB, last month said it was studying various ways to raise capital but had no plans for now to do so.
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