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Foreign banks to issue bonds

STANDARD Chartered Bank and HSBC said yesterday that they will issue yuan-bonds on Chinese mainland - the first two overseas banks to announce such a plan.

Standard Chartered Bank (China) Ltd said yesterday that it will issue up to 3.5 billion yuan (US$512 million) of yuan-bonds on the national interbank bond market, which is open to institutional investors.

Standard Chartered said it has started work to prepare for the issuing of onshore yuan bonds, although a timetable is unavailable.

"Through the issuance of yuan bonds, we hope to leverage our strengths, network and experience to support the sustainable, long-term growth of the Chinese economy," said Katherine Tsang, executive vice chairwoman and chief executive officer of Standard Chartered Bank (China).

Standard Chartered China is the local incorporated subsidiary of the British bank.

Meanwhile, HSBC China, the local incorporation of HSBC on the mainland, posted a similar onshore yuan-bond plan yesterday.

"HSBC China is also actively preparing for an onshore yuan-bond issue after obtaining approval to issue yuan-bonds in Hong Kong," said David Liao, managing director and head of global markets at HSBC China. "We seek to help establish a representative pricing benchmark and support the development of the yuan financial market, both onshore and offshore."

HSBC and Bank of East Asia in May obtained the regulatory green light to issue yuan-bonds in Hong Kong.

Overseas banks said the yuan issuance shows their support of the plan to turn Shanghai into a major financial center by 2020.

Supporting locally incorporated foreign banks to issue yuan-backed bonds is one of the key items on the Shanghai government's agenda.

"We hope to assist in elevating the (yuan's) status as an international reserve currency and also contributing towards Shanghai's development as a global financial center," said Standard Chartered Bank Group Chief Executive Peter Sands.

Seventeen locally incorporated overseas banks were operating in Shanghai by the end of last year.


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