Bank of Communications redeems RMB30bn undated capital bonds

Bank of Communications Co., Ltd. has fully redeemed its RMB30 billion 2020 Undated Capital Bonds on September 25, 2025. This redemption aligns with the prospectus terms, which granted the bank the right to redeem these bonds at nominal value after five years from their issuance date. The original issuance was announced on September 25, 2020.

This redemption is a significant event for the bank, as preference shares, which these undated capital bonds represent, are a component of its capital structure. The bank’s Articles of Association, updated in 2025, detail provisions for preference shares, including their issuance, redemption, and dividend distribution. Specifically, Article 277 permits the bank to redeem all or part of its preference shares after five years, subject to regulatory approvals and certain conditions.

The bank's Articles of Association specify that preference shares issued by the bank shall not have any put option and preference shareholders have no right to require redemption. The exercise of the redemption right requires the bank to either replace the preference shares with capital instruments of equal or superior quality or maintain a capital position significantly higher than regulatory requirements after redemption. The redemption price for domestic preference shares is par value plus declared but unpaid dividends for the current period.