As attention shifted from the international renminbi to onshore opportunities, one bank parlayed its Dim Sum dominance into pole position in the Panda bond market. For leading the key developments across Asia’s local currency markets, HSBC is IFR’s Domestic Bond House of the Year.
As local currency and domestic bonds grow in importance on the back of significant developments in the onshore renminbi market, HSBC stood out for its reach and innovation across Asia’s capital markets.
It is the only non-Chinese bank among the top five bookrunners of Asian currency bonds and comfortably the biggest arranger outside of the Chinese and Australian markets, with a monumental 204 deals to its name during IFR’s review period, excluding certificates of deposit and commercial paper. HSBC is the only bank to rank as a top-five bond house in seven of the region’s local currency markets, with a strong showing in rupees, rupiah, pesos, baht, Singapore dollars, offshore renminbi and Hong Kong dollars.
Arguably, the most significant local currency deal in 2015 was HSBC’s own three-year Rmb1bn (US$157m) Panda bond in September, which proved that entirely foreign commercial banks could access the onshore renminbi market. The deal, which came alongside a Panda from Bank of China Hong Kong, served as a curtain-raiser for future issues under revamped guidelines, which are a key part of China’s currency reforms.
HSBC was equally agile in the offshore renminbi market, opening it in 2015 with a Rmb500m Formosa trade for Air Liquide and taking a leading position in such issuance as it recognised an opportunity to pair foreign issuers with Taiwanese investors.
“HSBC is very excited about the prospects offered by the renminbi capital markets,” said Alexi Chan, global co-head of debt capital markets at HSBC. “Our own Panda bond was one of the highlights of the year. We continue to be at the forefront of new developments in renminbi bonds, both onshore and offshore.”
The bank was also active onshore in structured finance, becoming the first foreign bank to complete a renminbi securitisation with a Rmb1.35bn collateralised loan obligation in January. It followed this up with BMW’s Rmb2.57bn asset-backed securities in June, the first ABS with a Class A1 and A2 structure in China’s domestic market, helping the issuer achieve a record-low coupon.
HSBC used its network and expertise to great effect with a series of Tier 2 capital deals across the region, proving that Asia had a role to play in helping global issuers diversify their investor base and raise cost-effective capital.
That reach was best demonstrated in the way it helped Australian issuers to raise capital in renminbi and in Singapore dollars. It also brought French banks BPCE and BNP Paribas to the Dim Sum market for T2 trades.
“Our success this year in helping a number of global financial institutions raise regulatory capital in Asia’s local currency bond markets showcased the unique reach of HSBC’s debt platform,” said Chan.
As Green bonds gained traction in the region, HSBC was joint global coordinator on Agricultural Bank of China’s dual-currency issue, including the first Green Dim Sum from a Chinese financial institution. It also worked on CLP India’s multi-tranche Green debut.
In the Philippines, HSBC helped introduce a new settlement mechanism for San Miguel’s Ps33.5bn (US$711m) preferred share offering, allowing both the old pref shares and new ones to settle on the same day, making it easier for existing holders to reinvest.
In Malaysian ringgit, HSBC managed the first rated corporate perpetual sukuk, for Malaysia Airports Holdings, and brought Turkish bank Turkiye Finans to market for a five-year sukuk of M$210m (US$50m).
Other highlights included Kexim’s Bt10bn (US$279m) three-year bond, the largest Thai baht single tranche offering from a foreign issuer, and Ascendas REIT’s first perpetual in Singapore dollars.
In rupees, it was a bookrunner on International Finance Corp’s return to the Masala market, and helped arrange the private placement of a Rs26.1bn (US$393m) project finance bond for SP Jamma Udhampur Highway.
With its footprint firmly in all of the most important local currency and domestic bond markets, HSBC is well placed to build on its year of innovative blockbuster deals.
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