Big Four Chinese banks to raise capital overseas

Total Loss Absorbing Capacity requirements are likely to cause China’s Big Four banks to issue billions of dollars of bonds overseas, and expand the non-bank institutional investor base for China’s domestic bond market.
Bank of China issued a $3 billion TLAC bond in September
Bank of China issued a $3 billion TLAC bond in September

The Big Four Chinese state-owned banks will soon have to issue billions of dollars of offshore bonds, out of an urgent need to meet an international financial standard, the Total Loss Absorbing Capacity TLAC. The People’s Bank of China PBOC recently said that the Big Four banks probably need to implement TLAC ahead of schedule, because China’s corporate debt has risen to perilously high levels. This massive offshore fundraising will boost the non-bank institutional investor base of China’s domestic bond market.

The Big Four state-owned banks comprise Bank of China BOC, Industrial and Commercial Bank of China ICBC, Agricultural Bank of China...

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