Saturday, 20 April 2024

DBS broadens China bond market access with new licence to underwrite corporate bonds

5 min read

DBS China has received a licence from China’s National Association of Financial Market Institutional Investors to underwrite debt financing instruments for non-financial enterprises, including foreign issuers, in the China Interbank Bond Market.

As the first Southeast Asian headquartered bank to secure this licence, non-financial enterprises outside of China can now leverage DBS’ track record in helping foreign governments and agencies, supranational organisations, and financial institutions tap the world’s second-largest bond market.

In 2023, DBS China was the joint lead underwriter for RMB 16.5 billion ($2.2 billion) of Panda bonds issued in the China Interbank Bond Market, accounting for over 10% of the RMB 140 billion ($19.4 billion) market that year. This cemented DBS China as the most active foreign bank for Panda bonds in the China Interbank Bond Market, a pole position the bank has held since 2021.

Foreign issuers are increasingly tapping China’s bond markets for financing. According to Chinese financial data provider Wind Information, issuance of Panda bonds in the China Interbank Bond Market last year hit a record RMB 140 billion ($19.4 billion), an almost 70% jump from RMB 83 billion ($11.5 billion) in 2022.

Ginger Cheng, CEO of DBS Bank (China), said: "The growth of Panda bond issuances highlights the domestic bond market’s depth and rising international standing, driven in part by the government’s initiatives to internationalise its financial markets. As one of the first foreign banks to participate in the China Interbank Bond Market, our new underwriting licence expands DBS’ existing capabilities and networks in helping both foreign and local issuers access this attractive market.”

Clifford Lee, global head of fixed income, DBS Bank, said: “DBS has supported several multilateral development banks, foreign governments and European financial institutions to issue Panda bonds, some of which were inaugural issuances. These also include Panda bonds with green, sustainable and social labels, underscoring the Chinese capital market’s growing sophistication and ability to finance the global transition towards a more sustainable future.”

DBS China has established itself as one of the top foreign banks in underwriting onshore debt financing instruments. Some of its milestone achievements include:

• Participating in RMB 248.7 billion ($34.6 billion) of bond issuances in the China Interbank Bond Market last year, including Supranational, Sovereign, and Agency (SSA) Panda bonds, financial institution Panda bonds, financial bonds and local municipal bonds.
• Underwriting the first green financial bond issued by a foreign bank
• Bringing the first financial institution issuer from Korea to the China Interbank Bond Market
• Acting as the only non-affiliated foreign lead underwriter for eight Panda bond and financial bond issuances last year

DBS China received awards by the Shanghai Stock Exchange in 2021 and Shenzhen Stock Exchange in 2023  for its performance in municipal bonds.

Re-disseminated by The Asian Banker

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