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HSBC, StanChart Sell Singapore’s First Dim Sum Bonds

By Rachel Evans and Benjamin Purvis
May 27, 2013 8:01 AM EDT 2 Comments
ICBC was appointed as Singapore’s renminbi clearing bank by the People’s Bank of China on Feb. 8, according to a statement on the Singapore monetary authority’s website.
Photographer: Munshi Ahmed/Bloomberg
ICBC was appointed as Singapore’s renminbi clearing bank by the People’s Bank of China on Feb. 8, according to a statement on the Singapore monetary authority’s website.

HSBC Holdings Plc (HSBA) and Standard Chartered (STAN) Plc sold the first yuan-denominated bonds in Singapore, making the city state the third offshore hub for notes in the Chinese currency.

HSBC priced 500 million yuan ($81.7 million) of two-year notes through its Singapore branch at 2.25 percent, according to an e-mailed statement from Europe’s biggest bank. Standard Chartered, which generates most of its operating profit in Asia, sold 1 billion yuan of 2.625 percent three-year notes, according to a separate e-mailed statement from the lender. The notes priced to yield 2.75 percent, a person familiar with the matter said earlier today.

DBS Group Holdings Ltd. (DBS) is also looking to issue yuan-denominated securities in Singapore as Industrial & Commercial Bank of China Ltd. (601398)’s local branch begins clearing services from today for the renminbi. Taipei became the second hub for offshore yuan note sales in February, following the start of the Dim Sum bond market in Hong Kong in 2007.

“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,” Matthew Cannon, head of global markets at HSBC Singapore, said in the statement.

Offshore debt sales in the currency of Asia’s biggest economy may reach as much as 360 billion yuan this year, according to estimates from HSBC. The yuan has gained 0.7 percent against the dollar this month while the Singapore dollar has lost 2.2 percent, according to data compiled by Bloomberg.

Milestone Development

“We see this as another milestone for Singapore in the development of its status as an offshore RMB hub,” said Ray Ferguson, chief executive officer of Standard Chartered Bank Singapore, in an earlier statement.

The Dim Sum notes issued by both banks will be cleared through Central Depository Pte, a unit of Singapore Exchange Ltd. (SGX) ICBC was appointed as Singapore’s renminbi clearing bank by the People’s Bank of China on Feb. 8, according to a statement on the Singapore monetary authority’s website.

The Hong Kong regulator’s Central Moneymarkets Unit and Bank of China Hong Kong Ltd. provide that infrastructure in the territory, while Taiwan Depository & Clearing Corp. and Bank of China’s Taipei branch operate in Taiwan.

To contact the reporters on this story: Rachel Evans in Hong Kong at revans43@bloomberg.net; Benjamin Purvis in Sydney at bpurvis@bloomberg.net

To contact the editor responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net

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