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HSBC gets first China approval to sell bonds in interbank market
[HONG KONG] The People's Bank of China has allowed HSBC Holdings Plc to sell bonds in the country's interbank market, its first such approval for a foreign commercial bank.
The central bank gave HSBC the green light to sell 1 billion yuan (US$157 million) of bonds in the interbank market, according to a statement on its website. The PBOC also allowed BOC Hong Kong Holdings Ltd, controlled by China's fourth largest lender by assets, to sell 10 billion yuan of bonds.
The approval "could signal the opening up of an alternative source of funding for global borrowers," Helen Wong, chief executive for Greater China at HSBC, said in a statement Tuesday.
"Accessing China's onshore market could be a natural next step for multinationals" that have issued yuan bonds outside of China and will create "new opportunities for Chinese investors," Mr Wong said.
The approval for HSBC came after the management bureau of China's Qianhai economic zone in the southern city of Shenzhen said it's looking for overseas institutions to sell yuan- denominated bonds in the country. The world's second-biggest economy is opening up its bond market at a faster pace as it lobbies for the yuan to be included in the International Monetary Fund's basket of reserve currencies.
The relaxation of capital controls could potentially spur a 13-fold jump in issuance of onshore securities by foreign firms to about 100 billion yuan by 2020, Deutsche Bank AG estimated in June.