China Construction Bank, one of the country's four largest State-owned commercial banks, planned to issue 10 billion yuan (US$1.2 billion) in 10-year subordinated bonds, the main underwriter for the deal said Tuesday.

The issue would include two separate tranches with one carrying a fixed rate and the other a floating rate, said a senior official at China International Capital Corp., whose two largest shareholders are Morgan Stanley and China Construction Bank.

The spokesman said the subordinated bonds would be tradable in the inter-bank market from Wednesday to Dec. 27.

It is the third subordinated bond sale offered by the Chinese lender so far this year. It issued 15 billion yuan in 10-year subordinated bonds with fixed and floating-rate tranches in July, and then sold a 8.3-billion-yuan, 10-year tranche at a fixed rate of 4.95 percent.

The bank is one of two State-owned lenders chosen by the Central Government as pilots of the country's banking reform. The issuing of subordinated bonds is expected to help strengthen its capital base as it restructures and prepares for initial public offering in domestic and international stock markets, possibly next year.

Source: Shenzhen Daily-Agencies