Bank of Zhengzhou, a Chinese commercial lender, raised $1.19 billion from the sale of a Basel III-compliant additional tier 1 bond this week, underscoring a growing appetite among Chinese lenders to issue the bank debt.
The bank’s maiden AT1 deal followed Postal Savings Bank’s sale of the instruments last month, which are used to recapitalize a bank’s capital structure and avoid the risk of using taxpayer’s money for a bail-out in the event of a distressed situation.
Yield-hungry investors bought the unrated paper because it offers a decent pick up over the five-year US Treasuries, or roughly about 356.7bp, according to bankers.
...
¬ Haymarket Media Limited. All rights reserved.
