China's biggest property lender has sold successfully 15 billion yuan (1.8 billion US dollars) in subordinated debts in the first step of its ambitious bond plan scheduled to finally reach 40 billion yuan (4.8 billion dollars), a China Construction Bank (CCB) source said Monday.

The fund inflow would help CCB to boost its capital base as the bank cranked up preparations for a stock listing, analysts noted.

It is the biggest such issuance so far in the country -- more than the Bank of China's 14.07 billion yuan (1.7 billion dollars) sold earlier this month.

CCB's first-tranche subordinated debts include 11.14 billion yuan (1.3 billion dollars) in 4.87 percent fixed rate bonds and 3.86 billion yuan (465.1 million dollars) in floating rate debts.

They were snapped up by institutional investors including the Industrial and Commercial Bank of China (ICBC), China International Capital Corp., Bank of Communications and Bank of China, with ICBC purchasing the most -- 2.5 billion yuan (301.2 billion dollars).

Subordinated bond holders rank low among creditors, which allows buyers to demand a relatively high coupon interest rate. Funds raised can be represented by a bank's capital adequacy ratio.

When the remainder of the bonds is issued, CCB's capital-adequacy figure, a measure of its available capital in proportion to its outstanding loans, will reach 8 percent.

This is the minimum level set under the Basel Accord for commercial banks, which has been accepted in principle by China's banking regulators.

CCB's capital adequacy ratio stood at 6.51 percent at the end of last year.

CCB and the Bank of China are leading the Chinese government's latest, aggressive program to reform the banking system.

The two best performers' of China's Big Four banks each received 22.5 billion dollars in foreign currency at the end of last year from the central government in a bid to replenish their capital.

They are currently in talks with potential strategic investors and are likely to go public either in China, overseas, or both, by the end of this year or next year, industrial insiders told Xinhua.

And CCB is expected to become the first of China's Big Four state-owned banks to sell shares, with Bank of China following suit.

Under a WTO commitment, China will grant unrestricted market access to foreign banks by the end of 2006. Central authorities hope the listings will make domestic banks more sophisticated and market-oriented.

CCB, which has already split into a holding company and a joint-stock company with the latter including nearly all its core operations, had a non-performing loan ratio of less than 3.1 percent at the end of last month, down sharply from 8.8 percent atthe end of March.

It was able to make provisions to cover 75 percent of its bad loans, approaching the 80 percent target set down by regulators.

The bank saw its first-half operating profit rise 32 percent to32.8 billion yuan (about four billion dollars).

The Bank of China posted its capital adequacy ratio as having risen to 8.3 percent after it issued subordinated debts. Its non-performing loan ratio has plummeted to 5.46 percent.

ICBC said it was considering an initial public offering in 2006,while the Agricultural Bank of China, also one of the Big Four, has been keeping a low profile as it was saddled with mountains ofloans that turned sour in rural areas in the past decades.