European banks explore Panda bonds for capital needs

Hong Kong

EUROPEAN banks are actively exploring opportunities to issue subordinated debt in China's domestic market, according to treasurers, lawyers and bankers.

After a global sell-off in bank capital securities in January, a growing number of European banks have begun looking for alternative sources of funding.

Last month, Dutch lender ABN AMRO priced two Tier 2 deals in Taiwan and Singapore, achieving competitive results in size and pricing versus its euro curve. The US$300 million Taiwan deal was the country's first T2 bond, and drew strong demand from the island's insurance sector.

"The ABN deals showed that there is strong investor demand for subordinated debt in Asia," said Samuel Chan, executive director of bond syndicate capital markets at Standard Chartered. "European banks are exploring a range of markets and curr…