March 24, 2020 / 3:32 AM / 10 days ago

Agricultural Bank of China plans bond issue to fight coronavirus -sources

BEIJING/SHANGHAI, March 24 (Reuters) - Agricultural Bank of China (ABC) plans to issue special bonds worth 40 billion yuan ($5.65 billion) to support efforts to fight the spread of coronavirus, two sources with knowledge of the plans told Reuters.

Proceeds from the bonds, the first such issuance by a major state-owned commercial bank, would be used to support loans to small enterprises, the sources said.

The first 20 billion yuan tranche would have a tenor of three years, and the coupon is intended to be a fixed rate determined through book building and a centralised placement, they said.

The bank also plans to issue up to 40 billion yuan in callable 10-year Tier 2 capital bonds, the sources said.

ABC did not immediately respond to Reuters’ request for comment.

Bank of Beijing recently became the first Chinese lender to issue special bonds aimed at coronavirus-fighting efforts, issuing 30 billion yuan in three-year bonds and 10 billion yuan in 5-year bonds to provide loans to small companies.

Chinese regulators have sought to support debt financing and debt issuance by companies affected by the coronavirus outbreak.

Private-sector analysts are slashing their growth forecasts for China to lows not seen since the Cultural Revolution ended in 1976 as the coronavirus epidemic led to widespread travel curbs and halted production in the world’s second-largest economy.

The respiratory disease has killed nearly 3,300 people and infected more than 82,000 in mainland China. ($1 = 7.0765 Chinese yuan)

Reporting by Xiaochong Zhang and Andrew Galbraith; Editing by Sam Holmes

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