Changchun Development Rural Commercial Bank temporarily suspends interest payments on one Tier 2 capital bond: The rural financial risk reform work is progressing in an orderly manner.

Ask AI · How to protect bondholders’ rights and interests when coupon payments are deferred under the rural credit reform?

On March 30, the Paper learned exclusively that a financial institution received a notice dated March 25 from Changchun Development Rural Commercial Bank Co., Ltd., titled “Announcement on Deferring Interest Payments on the ‘21 Changchun Development RCB Subordinated Bonds (Level 2)’.” It will defer the current interest payment on this bond, and at the same time, the bond will not be redeemed.

“21 Changchun Development RCB Subordinated Bonds (Level 2)” is a tier-2 capital bond issued on March 30, 2021 (bond code: 2121008.IB). The issuance size was RMB 600 million. The coupon rate for the current interest period is 5.80%, the bond term is 10 years, and the issuer has a redemption option at the end of year 5.

The most recent interest payment date for this bond was March 30. The announcement states that, at present, Changchun Development Rural Commercial Bank is advancing the reform and risk-resolution work in accordance with relevant arrangements, so the interest on the “21 Changchun Development RCB Subordinated Bonds (Level 2)” will be deferred.

In addition, another announcement issued simultaneously by Changchun Development Rural Commercial Bank shows that the issuer will not exercise the redemption option for this tranche of bonds.

A staff member of Changchun Development Rural Commercial Bank told the Paper that the reform and risk-resolution work for the rural credit system is being advanced in an orderly manner. There is currently no clear timeline, but the bank has already established contact with bondholders, and any new information will be communicated to them.

Tier-2 capital bonds refer to bonds issued by commercial banks under regulatory requirements such as the “Administrative Measures for the Capital of Commercial Banks (Trial)” for the purpose of replenishing a bank’s tier-2 capital. Their main role is to absorb losses during the bankruptcy liquidation of a bank, thereby reducing the government’s bailout costs and other negative social impacts arising from bankruptcy.

According to the “Administrative Measures for the Capital of Commercial Banks,” for tier-2 capital instruments issued by a commercial bank, in the last five years prior to the maturity date, the amount that may be included in tier-2 capital shall be reduced year by year at the proportions of 100%, 80%, 60%, 40%, and 20%, respectively.

Changchun Development Rural Commercial Bank has now been formally placed under the management of Agricultural Bank of China. On September 29, 2025, the Jilin Office of the National Financial Regulatory Administration issued the “Approval of the Jilin Financial Regulatory Office on Changes of Names of 57 Institutions Including the Chaoyang Sub-branch of Changchun Development Rural Commercial Bank Co., Ltd.”

According to a report by the Rural Finance Times, behind the renaming is a major adjustment in the administrative assignment of banks such as Changchun Development Rural Commercial Bank—placed under Agricultural Bank of China’s management. This is not a single-institution name change only, but an important step in the process of rural credit reform and risk-resolution.