China Construction Bank (CCB), one of China's four leading commercial lenders, began a 30 billion yuan (US$4.39 billion) offering of subordinated callable bonds in the interbank market Tuesday.

The proceeds are intended to enhance its operations and risk management capabilities.

The bank will issue the bonds from Tuesday through March 2.

According to the Beijing-based bank, the issue will have two tranches. One will be 15 billion yuan in 10-year fixed rate bonds callable after five years. The other half will be 15-year fixed-rate bonds callable after 10 years.

CCB said the issue would improve it capital adequacy ratio, support its strategic development goals and sharpen its competitive edge.

CCB's issue is among several bond issues recently announced by leading Chinese banks. Industrial and Commercial Bank of China, the country's largest commercial lender, announced in October that it would issue up to 100 billion yuan worth of subordinated bonds by the end of 2011.

Shanghai-based Bank of Communications (BOC), the country's fifth-largest lender, said earlier this month it would float up to 80 billion yuan of subordinated bonds before 2011.

Wang Shutong, an analyst with BOC, said the relatively low prevailing interest rates had attracted domestic banks to float bonds.

China has cut interest rates five times and lowered banks' required reserve ratio four times since September as part of its effort to support the economy.

The government has also taken other steps to boost the economy, including a 4 trillion yuan national stimulus package announced in November and a range of specific stimulus plans this year for light industry, petrochemicals, textile and other sectors.

(Xinhua News Agency February 24, 2009)