BEIJING (Reuters) - China's five biggest state-owned banks are to set up asset management companies (AMCs) to undertake debt-for-equity swaps, the financial publisher Caixin reported on Wednesday.

The five state-run banks are Industrial and Commercial Bank of China <601398.SS> <1398.HK>, Agricultural Bank of China (AgBank) <601288.SS> <1288.HK>, China Construction Bank (CCB) <601939.SS> <0939.HK>, Bank of China <601988.SS> <3988.HK> and Bank of Communications <601328.SS> <3328.HK>.

Each asset manager is expected to be capitalized at around 10 billion yuan ($1.45 billion), Caixin said, citing unnamed sources.

AgBank, the country's third-biggest bank by assets, said in a filing to the Shanghai Stock Exchange on Tuesday that it would set up a wholly-owned asset management division to undertake debt-for-equity swaps.

China's banking regulator called banks for a meeting on Oct. 13 to discuss establishing asset management subsidiaries to manage debt-to-equity swaps, according to Caixin, days after the State Council published guidance for reducing corporate debt by encouraging debt-for-equity swaps.

China's businesses sit on $18 trillion in debt, which is equivalent to about 169 percent of gross domestic product.

CCB, the country's second-biggest lender, already has announced seven debt-reduction deals with a total value of 83 billion yuan and is talking with foreign investors to take part in the deals, a senior banker told Reuters on Tuesday.

The Shanghai Securities Journal reported late on Tuesday that China Great Wall Asset Management Corp, one of the country's Big Four state-owned managers of distressed debt, would partner with two listed banks to establish an institution to handle debt-to-equity swaps, without naming the banks.

(Reporting by Stella Qiu and Matthew Miller; Editing by Jacqueline Wong)