AGRICULTURAL Bank of China (AgBank), the country’s third-largest lender by assets, plans to raise 120 billion yuan (US$17.44 billion) by issuing perpetual bonds this month to replenish capital, sources said.

AgBank is joining other Chinese lenders in a rush to sell non-fixed-term bonds in a bid to bolster capital buffers in a slowing economy.

Top lender Industrial and Commercial Bank of China will issue 80 billion yuan in perpetual bonds, or “perps,” Friday, it said.

Smaller rival China Bohai Bank plans to issue up to 30 billion yuan in perps in August.

AgBank’s planned perps carry the top-notch triple-A credit rating.

The claims of perpetual bondholders are weaker than those of normal debt holders, but slightly stronger than those of equity holders.

China has been encouraging lenders to replenish capital through various tools in capital markets. Adequate capital would enable them to absorb potential losses and provide much-needed lending in a sluggish economy.

China’s economic growth slowed to 6.2 percent in the second quarter from a year ago, its weakest in at least 27 years, as demand at home and abroad faltered in the face of mounting U.S. trade pressure. (SD-Agencies)