HSBC issues 1st yuan-denominated notes in S’pore

MANILA, Philippines - HSBC issued yesterday the first bond in the Singapore offshore renminbi (RMB) market, marking the first RMB bond in ASEAN and coinciding with the historical start of yuan clearing in Singapore.

In a statement, HSBC Singapore said the 500 million yuan two-year fixed rate notes will yield 2.25 percent.

HSBC Philippines president and CEO Wick Veloso, in a text message to The STAR, said this is a significant development as they may undertake similar issuance in other markets, including the Philippines, in the future.

“This just reiterates HSBC’s commitment to the RMB proposition. Though this deal is done in Singapore, it is something we can easily replicate anywhere else as we continue to trail blaze and give investors the ability to find meaningful assets denominated in RMB,” Veloso said.

HSBC serves around 60 million customers through four global businesses: retail banking and wealth management, commercial banking, global banking and markets, and global private banking.

The HSBC Group’s network covers 6,900 offices in 84 countries and territories in six geographical regions: Europe, Hong Kong, rest of Asia-Pacific, Middle East and North Africa, North America and Latin America. With assets of $2.65 trillion as of June 30, 2012, HSBC is one of the world’s largest banking and financial services organizations.

The RMB bond issuance in Singapore follows HSBC Group’s issuance in London of the first international RMB bond outside Chinese sovereign territories last year.

Matthew Cannon, head of global markets at HSBC Singapore said: “We are delighted to have executed this landmark issuance which shows the bank’s commitment to further developing the offshore RMB market. The funds will be used to finance the bank’s expansion of RMB-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.”

Guy Harvey-Samuel, group general manager and CEO of HSBC Singapore, added: “As well as this historic bond issue, the bank has also completed a number of other RMB transactions for our customers here in Singapore through the new yuan-clearing facility. These are just the latest in a series of pioneering RMB initiatives we have made in our bid to grow the range of RMB services to support the needs of our customers for yuan-denominated solutions and help boost Singapore’s development as a regional RMB clearing centre.”

In July 2011, HSBC Singapore executed a landmark RMB transaction that enabled one of its customers, a commodities trader, to access RMB funds from the Monetary Authority of Singapore’s yuan facility transaction under the bilateral agreement between the central banks of China and Singapore.

Earlier in February that same year, HSBC was one of the first banks in Singapore to launch RMB deposit accounts for its customers.