CHINA Development Bank has been given an initial quota to offer 30 billion yuan (US$4.94 billion) in exchange-traded bonds on the Shanghai Stock Exchange, Shanghai Securities News reported yesterday.

    The move beefs up China Development Bank’s capital and expands the Shanghai exchange’s role in the domestic bond market, analysts said.

    The impending issuance means China Development Bank will become the first domestic lender to issue exchange-traded bonds and it marks a major step by regulators to boost the country’s fledging fixed income market.

    The quota was jointly approved by the People’s Bank of China and the China Securities Regulatory Commission, the Shanghai exchange said in a statement yesterday.

    The move came after China’s banking and securities regulators last month gave the green light to lenders to issue exchange-traded bonds. In the past, banks in China were only allowed to issue bonds on the country’s interbank market.

    China Development Bank, which is active in offering financing linked to key government projects, is set to issue no less than 10 billion yuan fixed-rate bonds on the Shanghai Stock Exchange in the near term. The bonds will have two-year and five-year maturities, the bourse said, without giving further details of the terms.

    The move provides a fresh fundraising channel for lenders, which are facing increased pressure to replenish capital after the banking regulator began phasing in tougher capital rules this year in line with Basel III global standards. (SD-Agencies)