China CITIC’s tier 2 first explained

Author: Ashley Lee | Published: 13 Nov 2013
  • China CITIC International’s $300 million Basel III tier 2 offering was the first tier 2 bond in Asia that included a partial write-down feature;
  • The deal was popular with institutional investors, indicating that they are becoming more comfortable with the contractual loss absorption feature;
  • While ICBC Asia’s offering, the first USD Basel III Tier 2 bond in Asia, counted as both regulatory capital for the Hong Kong bank and its Chinese parent, China CITIC’s bond counted for regulatory capital for the Hong Kong bank only.

China CITIC Bank International issued a USD-denominated Basel III-compliant tier 2 bond on October 31. It represented the first tier 2 issuance in Asia with a partial write-down feature.

The $300 million issuance follows that of ICBC Asia, which also sold...