Last week’s US dollar Additional Tier 1 capital bond from Bank of Communications BoCom was not only a first from a bank in China, the innovative deal could also pave the way for the manner in which onshore lenders are likely to raise such capital going forward.
The lender, one of the biggest in China, sold a larger-than-expected Basel III-compliant $2.8 billion perpetual bond. Although these bonds have no maturity date, they often have a call date. In this case, it is after five years.
There was significant demand both onshore and offshore for the Reg S deal. Books that tipped $4 billion allowed pricing...