China's Ag Dev Bank 3-year bonds sold at 4.82 pct

SHANGHAI, July 4 - Agricultural Development Bank of China auctioned 10 billion yuan of three-year bonds in the interbank market on Friday at a yield of 4.82 percent, at the top end of forecasts, traders said.

The auction yield was well above Thursday's indicative secondary market yield of 4.7137 percent bid for three-year financial bonds issued by policy banks <CN3YSFIX=R>, according to Reuters Reference Rates.

Traders said the auction was affected by recent upward pressure on three-year central bank bill yields in the secondary market. Bill yields have been hit by speculation that the central bank might soon issue special three-year bills to individual banks as part of monetary tightening.

"Traders expected the bond auction yield would be quite high because the rising three-year bill yield is pushing up three-year financial bond yields," said a trader at a mid-sized Chinese bank in Shanghai. (Reporting by Li Hongwei and Karen Yeung; Editing by Andrew Torchia)

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