China Construction Bank Completes RMB70 Billion Bond Issuance

China Construction Bank has completed the issuance of RMB70 billion in Tier-2 Capital Bonds, according to an announcement released today. The issuance, finalized on October 21, 2026, forms part of a larger program approved by shareholders in November 2025, authorizing the bank to raise up to RMB700 billion through capital instruments and total loss-absorbing capacity debt.

The bonds comprise two tranches: RMB55 billion with a 10-year term and a 1.74% coupon rate, subject to potential redemption after five years, and RMB15 billion with a 15-year term and a 1.93% coupon rate, potentially redeemable after ten years. The proceeds will be used to replenish the bank’s Tier-2 capital, aligning with regulatory approvals.

This bond issuance follows a previously announced plan to issue RMB40 billion in Additional Tier 1 Capital Bonds, completed earlier in 2026, as part of the broader RMB700 billion capital-raising initiative. While the filing does not detail the specific regulatory pressures driving the capital raise, it reflects a proactive approach to capital management by China’s second-largest bank. The move comes amid broader concerns about financial stability within China, and the bank’s efforts to fortify its capital position.

The issuance of these bonds adds to the bank’s capital base, providing a cushion against potential losses and supporting future growth. The bank's continuing efforts to bolster its capital reserves, as evidenced by this issuance and the prior Additional Tier 1 bond offering, are essential for managing risk and navigating the evolving financial landscape.