TRADE FINANCE | Tony Chua, China

HSBC and Citibank to apply as underwriter for more CNY bonds

The licenses would give more access to China’s interbank market where foreign companies such as UBS Securities and Goldman Sachs Gao Hua Securities are already underwriting bonds.

HSBC Holdings Plc and Citigroup Inc. are among several foreign banks that have applied to underwrite a wider range of yuan-denominated corporate bonds in China, a person familiar with the situation said.

No time frame has been set for approval of the applications, said the person, who asked not to be identified as he wasn’t authorized to speak to media. He declined to identify the other banks that have applied.

The Wall Street Journal reported the applications by HSBC and Citi earlier on Wednesday.

Winning the licenses would give HSBC and Citi greater access to China’s interbank market that’s 60-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 18.91 trillion yuan ($2.9 trillion) of outstanding bonds at the end of April compared with 305.3 billion yuan ($47.2 billion) for the exchange market, according to Chinabond, the bond clearing house.

Stephen Thomas, a Shanghai-based spokesman for Citigroup, declined to comment on what he called “speculation.” Anthony Lin, a Shanghai-based spokesman for HSBC, said he couldn’t immediately comment.

View the full story in Bloomberg.

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