This Week in China: World’s Busiest Market for Risky Bank Debt Is Calm
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In the past 18 months, no group has issued more of the controversial additional Tier 1 bonds than Chinese banks.
State-owned lenders sold about $42 billion worth of AT1 notes, the riskiest type of bank debt, to onshore investors, Bloomberg Intelligence analysts Pri de Silva and Adrian Sim said in a recent note. Crucially, the funding has been used to reduce exposure to dollar debt and refinance at cheaper rates, redeeming almost $9 billion offshore AT1s at the same time.