Bank of China’s RMB 39.94 billion
($6.5 billion) AT1 offering proved the depth of
Asia’s capital markets, but the
bank’s innovative structure has also set a
precedent for the rest of the industry.
This was the first AT1 sold by a Chinese bank, the
first offering of preference shares from a Chinese bank
– either offshore or onshore; and the largest AT1
globally following the implementation of Basel III. The US
dollar-settled bonds were priced to yield 6.75% and were listed
on October 24.
But the structure of these AT1s differs from those
sold elsewhere because they needed to comply with regulations
from the China Banking Regulatory Commission (CBRC)
and China Securities Regulatory Commission (CSRC), while
also appealing to fixed income investors.