BoCom debuts first Chinese Basel III dollar bond

Bank of Communications raised a $1.2 billion 10-year bond note on Wednesday, the first major Chinese bank to issue a Basel III-compliant Tier 2 note from its head office.

The Reg S offering callable in year five priced at Treasuries plus 285bp, which is 5bp tighter than its initial price guidance, according to a source familiar with the matter. Its yield is 4.628% and coupon is 4.5%.

As a Basel III-compliant bond with loss absorption features triggers where investors could lose all their money if regulators decide the bank cannot survive BoCom’s Tier 2 bonds will be rated BBB by Fitch,...