CDB gets OK to issue bonds on Shanghai bourse

The China Development Bank (CDB) has been given an initial quota to offer 30 billion yuan ($4.94 billion) of exchange-traded bonds on the Shanghai exchange, the Shanghai Securities News reported on Wednesday.

The impending issuance means CDB will become the first Chinese lender to issue exchange-traded bonds and it marks a major step by Chinese regulators to boost the country's fledging fixed income market.

The CDB would issue bonds on the exchange for the first time on Friday, a move aimed at building China's bond market and helping to integrate the interbank market, which is closed to direct participation by ordinary investors, Reuters reported on December 18.

"The CDB will issue financial bonds on a trial basis as arranged by the People's Bank of China and the China Securities Regulatory Commission," the exchange said in a statement on its website, http://www.sse.com.cn/, on Tuesday, without giving details.

Banking sources have told Reuters that the bank could issue the bonds in batches, and that it would publish a prospectus for the first issue on Wednesday.

Chinese regulators have moved to ease restrictions on corporate debt issuance, and to reduce the net market impact of new rules cracking down on practices intended to evade lending restrictions.