China pledges more support for banks’ perpetual bond issuance
China will provide further support for banks’ perpetual bond issuance, including examining ways to broaden the investor base for such bonds, to help enhance lenders’ support for the real economy, a vice central bank governor said on Tuesday
Perpetual bonds, or “perps”, could potentially convert the debt into equity as more banks actively prepare to sell such bonds, Pan Gongsheng, vice governor of the People’s Bank of China (PBOC), told reporters at a briefing in Beijing.
The government does not have any quantitative target on the issuance of perps, Pan said.
Perps, referring to bonds with no maturity date, are seen as a major step toward recapitalization of banks, whose lending capacity to the real economy is largely limited by their capital adequacy.