Bank of Beijing's plan to sell as much as 10 billion yuan ($1.5 billion) of subordinated bonds on the inter-bank market has been approved by its board of directors and will be reviewed by its shareholders, China Business News reported Thursday.
The money raised through the bond sale, with a maturity of at least ten years, will be used to replenish the bank's Tier 2 capital, the report said.
According to the paper, Yan Xiaoyan, president of the bank, said the bank was making preparations but had not decided yet on the specific channel or form of the refinancing, after signing a strategic cooperation agreement with China Eastern Airlines Wednesday morning.
A source with Bank of Beijing said that the bank did not slow its pace in cross-region development and comprehensive operations during the rarely-seen lending spree in 2009, adding that the bank's capital adequacy level dropped rapidly last year despite remaining high on the spectrum compared with other banks.
The bank's annual business report showed its capital adequacy ratio topped 14 percent, making it the highest among the 14 listed Chinese banks at the end of 2009, with its core capital adequacy ratio exceeding 12 percent, the second highest among the banks.
