Investors on Friday rushed to bid for multi-billion-yuan subordinated bonds issued by the Industrial and Commercial Bank of China (ICBC) to boost its capital base, the bank said in a statement.

Total subscription from 41 institutions reached as much as 85.5 billion yuan (10.5 billion US dollars), far exceeding the 35 billion yuan (4.3 billion dollars) that the biggest bank of China planned to issue through the country's inter-bank market, it said.

Subordinated bond holders rank low among creditors, which allows buyers to demand a relatively high coupon interest rate. Funds raised can be represented by a bank's capital adequacy ratio (CAR), an index that shows its strength.

The ICBC said its CAR, being a measure of its available capital in proportion to its outstanding loans, will add roughly one percentage point following Friday's issue.

Earlier this year, the Chinese government injected billions of dollars into the bank to help it raise its CAR to 9.12 percent, already higher than the 8 percent minimum requirement for a commercial bank internationally.

The ICBC said active purchases of its sub-debts show that investors are very optimistic about its prospects.

The state-owned bank is bracing for stock market listings, through which it hopes to revamp its operations to meet challenges from foreign rivals. China will fully open its financial market to foreign banks by the end of 2006.

Source: Xinhua