HSBC’s bank sold its first benchmark RMB bonds
in London yesterday with demand at twice the level than
expected.

The bank sold three-year RMB-denominated
bonds, known as dim sum bonds, priced with a yield of 3%.

The transaction closed with HSBC issued RMB2bn
($300m) in bonds after booking RMB4bn, the bank said.

It made the UK-based bank the first to launch
a RMB-denominated bond outside Chinese sovereign territory and to
be issued from and distributed within Europe and Asia.

 

RMB strong demand in Europe,
Asia

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RMB bonds will be distributed within Europe
and Asia, and listed on the London Stock Exchange (LSE) aiming to
tap the growing pool of RMB liquidity across Europe.

The RMB bonds had strong demand from both
European and Asian investors with about 60% of the allocation going
into European accounts, according to the Financial Times.

HSBC co-head of global markets Spencer Lake
said: “We are delighted to have priced this trade which shows the
bank’s commitment to broadening the RMB investor base. We are
confident that this will open the market to other European and
non-European issuers looking to fund themselves internationally in
RMB and help contribute to this rapidly developing market.”

 

Londonemergence as
RMB investor base

HSBC’s bond issue coincided with the creation
of a new initiative to develop London as an international RMB
hub.

HSBC expects the international RMB bond market
to reach RMB1trn within three years as the demand for
RMB-denominated assets continues to grow.

HSBC’s strategy aims to promote London as a hub of products and
services, complementing Hong Kong, and seizing some of the
significant opportunities which this new market represents, the
bank said.

HSBC group chief executive Stuart Gulliver
said: “We are proud to be able to issue this bond. It represents
another step in London’s development as a premier international
trading centre for the renminbi and is an early sign of the huge
potential that this market represents.”