Bank of China prices offshore preference shares

Bank of China finished pricing its offshore preference shares on Wednesday, becoming the first listed company on the Chinese mainland to do so.
The lender aims to raise 6.5 billion U.S. dollars selling offshore preference shares and priced the interest rate of the equities at 6.75 percent, according to a statement it filed to the Shanghai Stock Exchange.
The issuance will be the largest single tranche U.S. dollar bank capital sale. ( Application has been made to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the offshore preference shares issued to professional investors only and such permission is expected to become effective on Oct. 24 this year, it said.
A further announcement will be made before the listing of and dealings in the offshore preference shares commence, it said.
The move is a milestone in China's pilot program to issue preference shares.
To help banks meet new global capital rules known as Basel III, the China Securities Regulatory Commission announced in March this year new rules of the pilot program allowing eligible companies to issue preference shares.
Preference shares, along with common shares, are two primary types of stocks that companies offer to investors. Preference shareholders have priority rights over ordinary shareholders in distribution of profits and residual assets.
Unlike common shares, preference shares function more like a bond. They are rated by major credit-rating companies and their prices are affected by change in interest rates.