CCB plan Destination wedding dresses s to issue $2.9b in sub-bonds
CCB plan Destination wedding dresses s to issue $2.9b in sub-bonds
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CCB plans to issue $2.9b in sub-bondsPublished: 10 Dec 2009 16:02:01 PST
A CCB branch in Beijing. Photo: CFP
China Construction Bank is considering issuing about 20 billion yuan ($2.92 billion) in subordinated bonds to supplement its capital, sources said Thursday.
The nation's second-largest lender plans to complete the issuance of the bonds by the end of the 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 that began 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 ($43.94 billion).
CCB, in which Bank of America holds roughly an 11 percent stake, has issued a total of 60 billion yuan ($8.79 billion) in subordinated bonds so far this year. Its capital adequacy ratio at the end of September was 12.11 percent, down 0.05 percentage points from the end of 2008.
Chinese banks must keep their capital adequacy ratio – 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.
China's banking regulator denied last month that it was asking the country's big banks to increase their capital adequacy ratio to 13 percent, but was urging banks that have insufficient capital to come up with plans to strengthen their balance sheets.
Bank of China, a smaller domestic rival to CCB, said last month it was studying various ways to raise capital but had no plans for now to do so.
Reuters
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