UPDATE: Mizuho Corporate Bank To Lead Manage Chinese Bank Bond Issue

6th Jul 2010 09:54

(Adds background regarding Japanese banks' business expansion in Asia.) By Atsuko Fukase At DOW JONES NEWSWIRES TOKYO (Dow Jones)--Mizuho Corporate Bank Ltd. said Tuesday it will act as joint managing underwriter for China Development Bank's dollar bond offering later this week, making it the first foreign bank to serve as a principal lead manager for a bond issuance by a Chinese bank. Mizuho's involvement reflects how eagerly profit-starved Japanese banks are looking for opportunities in China, where the government is working toward becoming an international financial center by gradually opening its capital market to foreign players. The wholesale banking unit of Japan's Mizuho Financial Group Inc. (8411.TO) along with the Agricultural Bank of China, will lead manage China Development Bank's $400 million (Y36 billion) bond offering with the principal due to mature in three years. Mizuho will buy about a third of the offering for around $1.3 million, the Tokyo-based financial group said. Japan's second largest bank by assets said it is working to respond to diverse demand for capital-raising in China. China has allowed foreign banks to underwrite bonds since July 2009, but so far HSBC Holdings (HBC) has served as one of several underwriters, not as lead underwriter. Japanese banks have been struggling to increase profitability due to low interest rates and sluggish lending. They are therefore moving to build a presence in China, one of the world's fastest growing economies. In May, Bank of Tokyo-Mitsubishi UFJ, the banking unit of Mitsubishi UFJ Financial Group Inc. (8306.TO), became the first foreign commercial bank to sell yuan-denominated bonds in mainland China by issuing 1 billion yuan ($146.5 million). The issuance also marked an important step forward in China's effort to gradually transform the tightly controlled yuan into a major global currency by boosting its use for international trade settlement, and encouraging foreign firms to raise funds in yuan for their operations in China. -By Atsuko Fukase, Dow Jones Newswires; 813-6269-2792; [email protected] (END) Dow Jones Newswires July 06, 2010 04:54 ET (08:54 GMT)