Beijing: Bank of China, the nation's third-largest lender by market value, plans to raise 40 billion yuan (Dh22 billion) selling convertible bonds this week to replenish capital.
Investors can buy the six-year bonds on June 2, Beijing-based Bank of China said in a statement to the Shanghai Stock Exchange. The bonds may be converted into yuan-denominated A shares starting six months after the issuance at 3.88 yuan apiece, according to the statement.
Chinese banks are under pressure to raise money to meet tougher financial guidelines after an unprecedented 9.59 trillion yuan of new loans last year weakened their capital. Bank of China advanced 1.6 trillion yuan of new loans in 2009, more than any lender in the country.
The bank's capital adequacy ratio fell to 11.09 per cent as of March 31, below the minimum 11.5 per cent required by the China Banking Regulatory Commission.
Shareholders approved the bond sale in March, and also granted the lender a mandate to sell as much as 20 per cent of its outstanding stock in Hong Kong or Shanghai, or in both markets.
