Eurobond's US$15 trillion market offers Chinese issuers a path to global investors
As many of these projects span multiple years, Eurobonds can be a suitable debt instrument providing liquidity management.
"The Eurobond market is primarily a buy-and-hold market, typically featuring longer-term instruments," said Urbain. "Depending on the quality of the issuers, those assets can also be used for securities lending and collateral management."
In July, Bank of China (Hong Kong) joined a Eurobond network as a common depository, safe keeper and service provider. The move - the second by a Chinese bank following China Construction Bank (Asia) in 2020 - was expected to attract more Chinese issuers and investors to the market.
Familiarity with China would make global investors more comfortable with exposure to the yuan, creating a virtuous circle and supporting yuan internationalisation, Euroclear executive says. Photo: AP alt=Familiarity with China would make global investors more comfortable with exposure to the yuan, creating a virtuous circle and supporting yuan internationalisation, Euroclear executive says. Photo: AP>
"Drawing on its deep ties to the Chinese market, BOCHK further diversifies and enriches the participant base of the Eurobond market," said Andrew Law, the bank's head of custody and trust services, in a statement in July. "We are committed to driving financial innovation and enhancing liquidity for our clients, meeting the growing demand for diversified investment opportunities."
Chinese entities' offshore, non-yuan issuances this year rose 13.2 per cent to US$70.78 billion from a year earlier, according to Dealogic data. The largest deals came from financial institutions, led by the Asian Infrastructure Investment Bank's two US$2 billion issuances in January and September, and China Construction Bank's two US$1.5 billion offerings in May and September through its Hong Kong and London subsidiaries, respectively.
"The more Chinese names that are available, the better investors gain an understanding of China," Laurensy said.
That, in turn, would make such investors more comfortable with exposure to the yuan, creating a "virtuous circle" and supporting yuan internationalisation, he added.
"It doesn't happen overnight, but it's about putting the small pieces together to make it work," he said.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.
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