(Bloomberg) -- One of the biggest issuers in China’s bond market is considering accelerating debt issuance in the second quarter, a move that may exacerbate supply concern triggered by earlier plans for special government bond sales.

The Agricultural Development Bank of China is researching into plans sell more bonds in the coming three months to “appropriately” increase the proportion of long-term debt in its issuance, it said in a WeChat message in response to a Bloomberg query. 

The bank said in a meeting Wednesday afternoon it’s mulling an increase in debt issuance by about 100 billion yuan ($13.8 billion) in the coming quarter, according to people familiar with the matter. The lender didn’t elaborate on whether it would be in addition to its first-quarter sales or its original plan for the coming three months, said the people who asked not to be named as the information is private.

Read: China’s Bond Frenzy Fades Amid Worries Best Returns Are Over

ADBC may raise the size of its 10-year bond issuance to 13 billion yuan to 15 billion yuan at each auction, one of the people said. The bank on average has sold 10 billion yuan of bonds due in a decade in single auctions this quarter, according to Bloomberg compiled data.

A pick-up in debt issuance by China’s so-called policy banks may upend a bull run in the rates market, which is already stalling due to concern over the surge in supply of special sovereign notes and a weaker yuan. Bonds sold by so-called policy banks are popular alternatives to government debt in times of economic malaise as they are considered relatively safe and offer higher yields.

The nation’s three policy banks, namely ADBC, China Development Bank and Export-Import Bank of China, are the largest issuers in the nation’s domestic bond market after the Ministry of Finance. They are state-run financial institutions tasked to offer targeted support to selective sectors — such as agriculture and infrastructure — under close supervision from the central government, so debt sold by them is considered as quasi-sovereign by traders.

--With assistance from Amanda Wang.

©2024 Bloomberg L.P.