Shenzhen Development Bank, a mid-sized Chinese lender, said on Saturday that it plans to issue subordinated and hybrid bonds to raise up to 16 billion yuan ($2.10 billion) to boost its capital.
The bank, based in the Chinese boomtown of Shenzhen, near Hong Kong, plans to issue a yuan-denominated subordinated bond with maturity between 5 and 15 years in the domestic interbank market to raise 8 billion yuan, according to its stock filing.
Shenzhen Development Bank, nearly 18 percent owned by US investment firm Newbridge Capital, also said it plans to issue a hybrid bond with the same maturity as its subordinated bond to raise another 8 billion yuan to boost its capital adequacy ratio.
The bank's capital adequacy ratio was just 3.71 percent at the end of 2006, below the minimum regulatory requirement of 8 percent. The bond issuances were approved by the bank's board but still need shareholders' votes and regulatory approval, it said.