(ShanghaiDaily, Sept 29, 2006) INDUSTRIAL Bank Co, a Chinese lender one-quarter owned by foreign investors, sold 4 billion yuan (US$506 million) in hybrid bonds to boost capital before an initial public offering, Bloomberg News reported.

Industrial Bank sold 3 billion yuan in fixed-rate bonds at a 4.94 percent yield and 1 billion yuan in floating-rate debt at the benchmark one-year deposit rate plus 182 basis points.

The 15-year callable bonds, available only to institutional investors on China's inter-bank market, will allow Industrial Bank to delay interest payments if the lender's capital adequacy ratio falls below 4 percent or it's unable to pay other bondholders who have priority claims.

China is urging lenders to prepare for new competition at the end of this year, when restrictions end on foreign banks.
source:ShanghaiDaily