The Bank of China has become the first issuer to utilise Euroclear Bank’s recently launched Yulan bond structure.
The issuance was priced at $500 million with a tenor of three years and was four times oversubscribed.
Euroclear Bank’s Yulan bonds are issued through Shanghai Clearing House and will enable Chinese issues to gain exposure to a wider foreign investor base.
International investors will be able to benefit from real time multi-currency delivery versus payment settlement with any counterparty within Euroclear Bank’s network.
Zhou Quan, head of asset and liability management at the Bank of China, says it is “committed to supporting innovative initiatives that will benefit offshore and onshore bonds and promote China’s ‘dual circulation’ development pattern”.
As the first issuer of the Yulan bond co-created by Euroclear and Shanghai Clearing House, Quan comments: “We expect that this bond structure will yield further success and anticipate that this new generation of bonds will bring increased efficiencies and convenience to issuers and investors globally.”
Stephan Pouyat, global head of capital markets and funds services at Euroclear, explains that through a shared goal of building a new issuance model that enables increased foreign investment into the market, “we are seeing true demand for this service”.
Pouyat adds: “For the first time, international investors have full Euroclearable access to mainland Chinese securities. An issuance of this importance is a fantastic way to start 2021 as we continue to add momentum.”
In January, Euroclear launched a new data service, offering liquidity analysis on all fixed income instruments settled within the central securities depository.
The data service combines executed trade settlement data with custody activity data.
