Bank of China, the country s No. 3 lender by assets, will issue 40 billion yuan (US$6 billion) in bonds convertible into its Shanghai-listed A shares this week, the bank said yesterday.
Subscriptions for the bonds will start tomorrow, the bank said in a statement to the Shanghai Stock Exchange, with existing shareholders receiving priority.
Bank of China s bond issue is part of a broader effort by Chinese banks to raise funds to replenish their coffers after a lending spree in 2009.
The bonds will be convertible into the bank s Shanghai shares six months from completion of the issue, at a price of 4.02 yuan per share. Bank of China shares closed at 3.88 yuan yesterday, having fallen more than 7 percent so far this year.
Because of a scheduled 2009 dividend payment of 0.14 yuan per share Thursday, the conversion price will change to 3.88 yuan per share from that date, the bank said.
Bank of China president Li Lihui said Thursday it also hoped to complete the new Hong Kong share issue, the other component of its fundraising plans, by the end of this year.
Bank of China s capital adequacy ratio stood at 11.09 percent at the end of March, down from 11.14 percent at the end of 2009.
Bank of China s move to push ahead with its fundraising plans stands in contrast to rival China Construction Bank, which said this month it could delay its planned US$11 billion capital raising to early next year due to uncertain market conditions.
Subscriptions for the bonds will start tomorrow, the bank said in a statement to the Shanghai Stock Exchange, with existing shareholders receiving priority.
Bank of China s bond issue is part of a broader effort by Chinese banks to raise funds to replenish their coffers after a lending spree in 2009.
The bonds will be convertible into the bank s Shanghai shares six months from completion of the issue, at a price of 4.02 yuan per share. Bank of China shares closed at 3.88 yuan yesterday, having fallen more than 7 percent so far this year.
Because of a scheduled 2009 dividend payment of 0.14 yuan per share Thursday, the conversion price will change to 3.88 yuan per share from that date, the bank said.
Bank of China president Li Lihui said Thursday it also hoped to complete the new Hong Kong share issue, the other component of its fundraising plans, by the end of this year.
Bank of China s capital adequacy ratio stood at 11.09 percent at the end of March, down from 11.14 percent at the end of 2009.
Bank of China s move to push ahead with its fundraising plans stands in contrast to rival China Construction Bank, which said this month it could delay its planned US$11 billion capital raising to early next year due to uncertain market conditions.
