Chinese bank issues first Basel III-compliant bond

Tianjin Binhai Rural Commercial Bank TBRCB has raised Rmb1.5 billion $244 million by pricing the country’s first Basel III-compliant bond last night, setting a template and testing investor appetite for a further $38 billion of issuance from the industry, including the big four lenders.

The tier-2 bond, which has a 10-year maturity and is callable after five years, attracted good response and was finally 1.27 times covered despite the unfamiliar structure. Demand reached more than Rmb3 billion, according to a source familiar with the situation.

The majority of the notes went to banking accounts, especially those of wealth management products WMP and private banks. Demand from...