China Gives Nod To Bank of China’s Perpetual-Bond Sale to Boost Capital

China’s banking and insurance watchdog has approved a plan by Bank of China (BOC) to issue perpetual bonds, confirming it will become the country’s first commercial lender to use the tool to replenish capital, as regulators seek ways to help banks beef up their ability to absorb risks.

The China Banking and Insurance Regulatory Commission (CBIRC) said it gave the green light on Thursday for BOC to sell no more than 40 billion yuan ($5.9 billion) in perpetual bonds. This is the first time a commercial bank has been allowed to issue this kind of debt, it said in a statement (link in Chinese).