Clearstream and Euroclear, the international central securities depositories (ICSDs) have appointed China Construction Bank (CCB) Asia as common depository, safe keeper and service provider for its Eurobonds, international debt securities.
CCB Asia applied to, and successfully passed, the recent common depository qualification process and will be appointed as common depository, safe-keeper and service provider to support the ICSDs’ global Eurobonds issuance model, effective by mid-2020.
The two ICSDs act jointly as the central hub of issuance and deposit for Eurobonds, working with a number of large financial institutions acting as common depositories to support issuers across the globe.
According to Arnaud Delestienne, head of Eurobonds business at Clearstream, the popularity of Eurobonds as a funding and investment vehicle has been growing constantly, not just in mature markets such as Europe and Northern America, but globally, reflecting increased activity out of growing regions, such as Asia Pacific (APAC) and Asia, Middle East and Africa.
Delestienne said: “It has now become a cornerstone of global funding plans for Asian issuers, be it in USD, EUR or even local currencies. The appointment of CCB (Asia) reflects this growing demand, facilitating access to the international capital markets for Chinese issuers.”
It was also noted that issuers benefit from greater investor reach by leveraging the ICSDs’ international client bases and multi-currency model.
This international issuance model is supported by an interoperable link allowing clients to settle cross-border transactions seamlessly throughout the day, which increases the liquidity available to market participants.
CCB Asia’s transaction banking specialises in all aspects of corporate trust, private trust, fund trust, loan agency, custody and fund administration businesses.
Alan Lai, head of transaction banking at CCB Asia, commented: “CCB (Asia)’s aim is to broaden the Eurobond market to reach more APAC market participants – especially new issuers and investors from the People’s Republic of China.”
Lai continued: “As a leading PRC bank, we are ideally placed to leverage our brand and network to better serve PRC market participants in the same language and time zone. We are honoured to be the first PRC bank appointed as common depositary and we look forward to a successful partnership with the ICSDs.”
Kathleen Holemans, head of network management at Euroclear, added: “We are extremely pleased to be announcing with our colleagues at Clearstream the appointment of China Construction Bank (Asia) as common depository hub for our Eurobonds. The Eurobond market is attracting a wider investor base in Asia with an increased need for diversification and liquidity.”
