August 26, 2019 / 8:33 AM / 20 days ago

China's ExIm bank plans to sell 30 bln yuan of perpetual bonds - sources

BEIJING/SHANGHAI, Aug 26 (Reuters) - The Export-Import Bank of China plans to sell 30 billion yuan ($4.23 billion) worth of perpetual bonds, two sources with direct knowledge of the matter said on Monday, becoming the country’s first policy bank to issue such bonds.

The sources said Exim Bank also plans to sell an additional 60 billion yuan worth of tier 2 capital bonds.

The bank did not immediately respond to Reuters’ request for comment.

The sources said the issuer can adjust the yield every five years, but they gave no other details on the planned terms of the bonds or the timing of the sales.

Perpetual bonds are fixed-income securities with no maturity date that pay a steady stream of interest, though issuers do not have to redeem the principal.

Many Chinese banks need to replenish capital to meet increasingly stringent capital rules as they face both growing pressure to write off bad loans and government calls to aid the struggling economy amid the prolonged Sino-U.S. trade war.

The People’s Bank of China has conducted central bank bill swap operations to improve the liquidity of perpetual bonds and support banks’ issuance of the bonds to replenish capital.

$1 = 7.0928 Chinese yuan Reporting by Xiaochong Zhang in BEIJING and Andrew Galbraith in SHANGHAI; Editing by Kim Coghill

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