Minsheng Bank successfully issued 30 billion yuan of perpetual bonds

On August 19, China Minsheng Bank issued an announcement that it had successfully issued the “China Minsheng Bank Co., Ltd. 2024 Perpetual Capital Bond (First Phase)” in the interbank bond market across China, and completed the registration and custody of the bonds at the China Interbank Market Clearing Corporation. The bonds were booked and filed on August 15, and the issuance was completed on August 19. The issuance scale was 30 billion yuan, and the coupon rate was adjusted in stages. Every 5 years is a coupon rate adjustment period, and the coupon rate for the first 5 years is 2.35%. Perpetual capital bonds, also known as perpetual bonds, are an important tool for commercial banks to supplement other tier-one capital. In 2018, multiple departments jointly issued the “Opinions on Further Supporting Commercial Bank Capital Instrument Innovation”, encouraging commercial banks to supplement capital by issuing innovative capital tools such as perpetual bonds. Industry insiders believe that in the current low-interest rate environment, banks can obtain relatively cheap funds by issuing perpetual bonds, which will help supplement capital and further improve operating quality and efficiency. According to incomplete statistics, since 2024, 10 banks have successively issued perpetual capital bonds. The interest rate of this bond of Minsheng Bank is 2.35%. The issue price takes into account the interests of investors and issuers and achieves reasonable pricing. It is worth mentioning that the bank has also issued a full amount of additional bonds of no more than 10 billion yuan, and the final issue size is 30 billion yuan, which will help better meet the allocation needs of investors.

Relevant experts pointed out that as investors’ understanding and acceptance of perpetual bonds continue to increase, their confidence in bank credit and future development has further increased, providing a favorable market environment for bond issuance. From the perspective of this bond issuance of Minsheng Bank, various investors have subscribed enthusiastically, and the subscription multiple has reached 2.18 times. At the same time, the types of investors are diversified, including state-owned banks, joint-stock banks, city (rural) commercial banks, fund companies, insurance companies, securities companies and more than 120 institutions participated in the subscription, reflecting the market’s full recognition of Minsheng Bank’s brand and bond investment value.

According to relevant regulations, the funds raised from this perpetual bond will be used to supplement other Tier 1 capital of Minsheng Bank. Based on the data at the end of March 2024, after the issuance of this bond, the bank’s Tier 1 capital adequacy ratio and capital adequacy ratio will both increase by about 0.5 percentage points, which will help enhance the bank’s capital strength and further enhance its ability to serve the real economy and resist risks.

“Minsheng Bank successfully issued 30 billion perpetual bonds, providing a long-term and stable source of funds for its sustainable development.” Industry insiders pointed out that in the increasingly fierce market competition, commercial banks should maintain strategic focus, accelerate reform and transformation, consolidate customer base, optimize capital structure, continuously improve the quality and efficiency of serving the real economy, and promote high-quality economic development with high-quality financial development.