BEIJING, Feb 27 (Reuters) - China’s central bank on Tuesday announced new rules for banks’ issuance of bonds to replenish capital, aiming to help banks better absorb capital losses and better protect investors’ rights.
The rules would allow the bond issuer to write-off the bonds or convert them into equity under certain conditions, the People’s Bank of China said in a notice published on its website.
The new rules apply to bonds issued to meet capital requirements where repayment would be triggered based on certain conditions.
The notice said banks are encouraged to issue innovative loss-absorbing capital replenishment bonds, though banks should be cautious in formulating plans to issue such bonds. (Reporting by Beijing Monitoring Desk; Editing by Clarence Fernandez)