SHANGHAI (Reuters) - Agricultural Bank of China (AgBank), the country's third-largest lender by assets, plans to raise 120 billion yuan ($17.44 billion) by issuing perpetual bonds this month to replenish capital, two sources told Reuters on Tuesday.
AgBank (SS:601288) (HK:1288) is joining other Chinese lenders in a rush to sell non-fixed-term bonds in a bid to bolster capital buffers in a slowing economy.
Top lender Industrial and Commercial Bank of China (SS:601398) (HK:1398) will issue 80 billion yuan of perpetual bonds, or "perps", on Friday, it said.
Smaller rival China Bohai Bank [BOHAI.UL] plans to issue up to 30 billion yuan of perps in August.
AgBank's planned perps carry the top-notch triple-A credit rating. The sources declined to be identified as they were not authorized to speak to the media.
AgBank could be not reached immediately for comment.
The claims of perpetual bondholders are weaker than those of normal debt holders, but slightly stronger than those of equity holders.
Beijing has been encouraging lenders to replenish capital through various tools in capital markets. Adequate capital would enable them to absorb potential losses and provide much-needed lending in a sluggish economy.
China's economic growth slowed to 6.2% in the second quarter from a year earlier, its weakest in at least 27 years, as demand at home and abroad faltered in the face of mounting U.S. trade pressure.