HSBC to issue yuan-denominated bond in London

PanARMENIAN.Net - HSBC Holdings PLC said on Wednesday, April 18 that it plans to issue a yuan-denominated bond in London, the first issue of a "dim sum" bond in the city, marking a milestone in London's efforts to become a centre for offshore yuan trading alongside Hong Kong, Reuters reported.

The announcement of the bond issue by Europe's biggest bank coincides with the launch by the City of London Corporation of a working group including five major banks to develop the city into a major centre for offshore yuan business, which was welcomed by Chancellor George Osborne.

"It is the ambition of the British government to make London a western hub for the sector - with all the benefits that this will bring to our own economy," Osborne said in a speech.

HSBC is a member of the new working group, and has been a leader in the dim sum bond market in Hong Kong, which has seen explosive growth as China allows more avenues for yuan funds to flow across its borders and slowly internationalizes its currency.

HSBC leads the league tables as a book runner for dim sum bonds in Hong Kong, having led 48 issues so far this year with proceeds of 13.9 billion yuan ($2.2 billion) as of April 12, according to Thomson Reuters data.

It has released guidance that the three-year bond would yield 3.00-3.25 percent, IFR, a Thomson Reuters publication, reported earlier on Wednesday, citing a term sheet provided to investors.

The term sheet said the issue was a "benchmark" deal, implying it is worth at least 500 million yuan ($79.4 million).