CDB to issue first LPR-linked policy bank bonds
China Development Bank is to issue bonds worth up to 6 billion yuan ($852.41 million) this week, including the first such paper from a policy bank linked to the central bank’s Loan Prime Rate benchmark.
CDB plans to issue 3 billion yuan worth of two-year bonds with a floating coupon linked to the one-year LPR on Thursday, it said in a regulatory filing. The bank will also issue 3 billion yuan worth of ten-year bonds with a fixed 3.5% coupon, it said.
The one-year LPR is set by the People’s Bank of China based on quotes from a panel of banks, and became the official lending benchmark in August.
Last week, China lowered its one-year LPR to 4.15% from 4.20%, and cut the five-year LPR to 4.80% from 4.85%, as policymakers try to reduce company funding costs and boost an economy hit by weak domestic demand and U.S. trade tariffs.
