SGX, Euroclear Bank to launch Orchid bond structure bridging Singapore issuers, global investors

THE Singapore Exchange (SGX) is collaborating with Euroclear Bank to launch a new Orchid bond structure in Singapore, combining domestic bond issuance with global distribution channels.

Based in Brussels, Euroclear Bank provides settlement and related securities services for cross-border transactions involving domestic and international bonds, equities, derivatives and investment funds.

Through the initiative, international investors will be able to purchase bonds issued by Singapore-based issuers directly on The Central Depository (CDP), which is owned by SGX, via Euroclear. Investors will benefit from real-time multi-currency delivery versus payment (DVP) settlement with any counterparty within Euroclear's network.

HSBC was the arranger, custodian bank and paying agent in the setting up of the Orchid bond structure.

The addition of the Orchid bond structure allows market participants to tap SGX as a one-stop issuance, listing and distribution platform, the bourse said in its press release. SGX and Euroclear are also looking to extend the offering beyond Singapore to other regional issuers.

"We are excited to partner with Euroclear to offer issuers and investors with a win-win solution, by allowing issuers to tap into SGX's listing and depository capabilities, while at the same time giving global investors access to a fast-growing Asian bond market," said Lee Beng Hong, senior managing director and head of fixed income, currencies and commodities at SGX.

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Stephan Pouyat, global head of capital markets and funds services at Euroclear, added: "Within our ecosystem we see continued scope for this structure laying the foundation for ESG bond issuance in foreign currencies in the near future."

Gavin Powell, head of global markets at HSBC Singapore said that the bank is "excited by the possibilities Orchid bonds will offer issuers, who are seeking diversified funding sources and deeper liquidity pools, and for international investors hungry to pursue wider investment options".

Shares of SGX closed at S$9.91 on Thursday, down 0.4 per cent.