China Citic Bank prices $300m Basel III bond

The Chinese bank issues Asia’s second dollar-denominated Basel III Tier 2 note after ICBC Asia’s poor secondary market performance in the bank capital realm.
Citic’s notes have solo recognition, meaning that the debt is qualified as Tier 2 capital for the bank itself.
Citic’s notes have solo recognition, meaning that the debt is qualified as Tier 2 capital for the bank itself.

China Citic Bank International raised a $300 million 10.5-year Basel III-compliant Tier 2 subordinated note with a callable option in 5.5 years on Thursday, in spite of investor concerns for the pricing and structural elements of such bonds.

In order to address investor fears over Basel III-compliant debt instruments, the Chinese financial institution sought to improve the bond’s structure by making it more investor-friendly, building on the foundation of ICBC Asia’s Tier 2 note issued early-October.

For example, Citic’s notes have solo recognition, meaning that the debt is qualified as Tier 2 capital for the bank itself unlike ICBC’s, which was structured to achieve...

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