The international central securities depositories (ICSDs) Clearstream Banking S.A. and Euroclear Bank SA/NV have appointed China Construction Bank (Asia) Corporation Limited (CCB (Asia)) as common depository, safekeeper and service provider for their international debt securities, also known as Eurobonds. Deutsche Börse announced today.
As an international central securities depository (ICSD), headquartered in Luxembourg, Clearstream, which is part of Deutsche Börse Group, provides the post-trade infrastructure for the Eurobond market and services for securities from 58 domestic markets worldwide.
Euroclear Bank provides settlement and related securities services for cross-border transactions involving domestic and international bonds, equities, derivatives and investment funds.
The two ICSDs act jointly as the central hub of issuance and deposit for Eurobonds. They work with a number of large financial institutions acting as common depositories to support issuers across the globe. As a result, issuers benefit from greater investor reach by leveraging the ICSDs’ international client bases and multi-currency model. This international issuance model is supported by an interoperable link allowing clients to settle cross-border transactions seamlessly throughout the day, thereby increasing the liquidity available to market participants.
CCB (Asia)’s transaction banking specialises in all aspects of corporate trust, private trust, fund trust, loan agency, custody and fund administration businesses. The business offers comprehensive and customised agency and fiduciary solutions to support the full spectrum of capital market, asset management and fund industry transactions.
‘Survive and Thrive’: Gold-i’s Tom Higgins on Covid-19 StrategyGo to article >>
CCB (Asia) applied to, and successfully passed, the recent common depository qualification process and will be appointed as common depository, safe-keeper and service provider to support the ICSDs’ global Eurobonds issuance model. CCB (Asia) is expected to start its common depository service operations by mid-2020.
This geographic extension of the network demonstrates the attractiveness of the Eurobond model for Asia-Pacific (APAC) issuers. Leveraging Asian operations of common depositories facilitates primary market activities, including syndicated distributions, from the start of the business day in Asian markets allowing more efficient use of cash and securities. Likewise, it allows a closer connection to the APAC issuance and investor communities for a more efficient servicing of the securities throughout their life cycle.
Broadening the Eurobond market: CCB
“CCB (Asia)’s aim is to broaden the Eurobond market to reach more APAC market participants – especially new issuers and investors from the People’s Republic of China. As a leading PRC bank, we are ideally placed to leverage our brand and network to better serve PRC market participants in the same language and time zone. We are honoured to be the first PRC bank appointed as common depositary and we look forward to a successful partnership with the ICSDs,” Alan Lai, head of Transaction Banking at China Construction Bank (Asia) stated.
China Construction Bank (Asia) Corporation Limited (CCB (Asia)) is the comprehensive and integrated commercial banking business platform of China Construction Bank Corporation in Hong Kong. Currently, CCB (Asia) has over 50 outlets in Hong Kong and offers a wide array of banking products and services to customers, including consumer banking services, commercial banking services, corporate banking services, private banking services, treasury business and cross-border financial services, etc.
“The popularity of Eurobonds as a funding and investment vehicle has been growing constantly, not just in mature markets such as Europe and Northern America, but globally, reflecting increasing activity out of growth regions, such as APAC and Asia, Middle East and Africa. It has now become a cornerstone of global funding plans for Asian issuers, be it in USD, EUR or even local currencies. The appointment of China Construction Bank (Asia) reflects this growing demand, facilitating access to the international capital markets for Chinese issuers.” Arnaud Delestienne, head of Eurobonds Business at Clearstream, said.