Bank of China Issues RMB40 Billion in Loss-Absorbing Bonds

Bank of China issued RMB40 billion in bonds on September 7, 2026, to enhance its loss-absorbing capacity. The issuance, approved by shareholders on July 18, 2025, and relevant regulators, occurred in the domestic interbank bond market.

The bonds comprise two tranches. A RMB20 billion portion carries a fixed rate of 1.69% with a four-year term, including a conditional redemption option after three years. The remaining RMB20 billion has a six-year term, a 1.79% fixed rate, and a conditional redemption option after five years.

Net proceeds from the issuance will be used to improve the bank’s total loss-absorbing capacity, pending approval from competent authorities. The bank initially received shareholder approval to issue up to RMB200 billion in such instruments.

This bond issuance occurs as Chinese banks navigate evolving regulatory requirements related to capital adequacy and risk management. The broader context of interest rate movements and liquidity conditions within the Chinese interbank market will influence the performance of these bonds and the bank’s overall capital structure.