DBS China has received a licence from China’s National Association of Financial Market Institutional Investors to underwrite debt financing instruments for non-financial enterprises, including foreign issuers, in the China Interbank Bond Market. This makes DBS the first Southeast Asian-headquartered bank to receive the licence.
The move comes as foreign issuers are increasingly tapping the Chinese bond market, which is the second-largest in the world.
To be sure, the issuances of panda bonds in the China Interbank Bond Market surged by 70% y-o-y to hit a record RMB140 billion ($26.2 billion) in 2023. DBS itself has been the most active foreign bank for panda bonds in the China Interbank Bond Market since 2021. In 2023, DBS China was the joint lead underwriter for RMB16.5 billion – or over 10% of the total panda bonds issued that year. Panda bonds are renminbi-denominated debt that’s issued in China’s onshore market by non-Chinese companies, governments and organisations.
"The growth of panda bond issuances highlights the domestic bond market’s depth and rising international standing, driven in part by the government’s initiatives to internationalise its financial markets. As one of the first foreign banks to participate in the China Interbank Bond Market, our new underwriting licence expands DBS’s existing capabilities and networks in helping both foreign and local issuers access this attractive market,” says Ginger Cheng, CEO of DBS Bank (China).
“DBS has supported several multilateral development banks, foreign governments and European financial institutions to issue panda bonds, some of which were inaugural issuances. These also include panda bonds with green, sustainable and social labels, underscoring the Chinese capital market’s growing sophistication and ability to finance the global transition towards a more sustainable future,” adds Clifford Lee, global head of fixed income, DBS Bank.
