SINGAPORE May 27 British bank HSBC
sold 500 million yuan ($81.54 million) worth of two-year notes
in Singapore on Monday, launching the first dim sum bond in the
city state since yuan-clearing became available there.
China has been relaxing controls on the yuan, officially
referred to as the renminbi or RMB outside the country, in order
to gradually increase the use of its currency abroad.
Industrial and Commercial Bank of China has begun
yuan-clearing in Singapore, the world's fourth-largest forex
trading centre and the main Asian base for oil and commodity
Separately, Singapore Exchange on Monday launched
depository services for yuan-denominated bonds, otherwise known
as dim sum bonds, in a bid to support Singapore's development as
an offshore hub for issuers and investors of yuan-denominated
Yuan-clearing was already available in Hong Kong and Taiwan,
and previously, much of the yuan activity in Singapore had to go
through Hong Kong where yuan transactions could be cleared by
Bank of China.
Matthew Cannon, head of global markets at HSBC Singapore,
said proceeds from the yuan notes, which offer investors a yield
of 2.25 percent, will be used to finance the bank's expansion of
yuan-based lending assets.
"This issuance will help open the market to other issuers
looking to fund themselves internationally in RMB, offer new
investment opportunities to the substantial pool of wealth
managed in Singapore and assist in funding the rapidly growing
RMB-denominated trade business in Asia," he said, referring to
the yuan by its official name which is the renminbi or RMB.
HSBC's earlier pricing means it has beaten rival Standard
Chartered to the punch. Standard Chartered on Monday
offered a benchmark-sized issue of three-year notes.
Bookbuilding for the Stanchart notes has closed with an
indicative yield of 2.75 to 2.875 percent, IFR reported on
Besides HSBC and Stanchart, DBS Group is also
planning to issue yuan-denominated bonds. Singapore's largest
lender announced its plan on Thursday but has yet to launch the
China's yuan hit a record high against the dollar on Monday
for the seventh time this month after the central bank set the
midpoint at its strongest level.