Bloomberg News

HSBC Picked to Underwrite China Non-Financial Bonds, NAFMII Says

October 02, 2011

Bloomberg News

Oct. 2 (Bloomberg) -- HSBC Holdings Plc’s China unit has been selected as part of an underwriting group for corporate bonds in China, the National Association of Financial Market Institutional Investors said in a notice on its website.

HSBC was the only foreign bank to be selected to underwrite commercial paper and medium-term notes, the most liquid bonds in China, according to the notice, dated Sept. 30. The process started in April, and a filing has been submitted to the central bank, said the association, which is overseen by the central bank.

The announcement could give HSBC greater access to China’s interbank market, which is regulated by the central bank and is more than 50 times larger than the exchange market where foreign companies including UBS Securities Co. and Goldman Sachs Gao Hua Securities Co. already underwrite bonds. The interbank market had 19.59 trillion yuan ($3 trillion) of outstanding bonds at the end of August, compared with 375 billion yuan for the exchange market, according to Chinabond, the nation’s biggest debt clearing house.

Connie Lee and Vinh Tran, spokespeople for HSBC, couldn’t immediately be reached by phone for comment.

HSBC Bank (China) Co. helped underwrite 5 billion yuan of bonds for Bank of Shanghai, it said in November 2009. UBS Securities underwrote 19.8 billion yuan of bonds in China so far this year, according to Bloomberg data, making it the top foreign underwriter.

A total of 1.1 trillion yuan of commercial paper and medium-term notes approved by NAFMII was sold in China this year, according to data compiled by Bloomberg. That compares with 290 billion yuan of corporate bonds that are approved by the National Development and Reform Commission, the data show.

--Henry Sanderson. Editors: Terje Langeland, John Chacko

To contact Bloomberg News staff on this story: Henry Sanderson in Beijing at hsanderson@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net


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