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On 14 January 2013, Clearstream acted as the sole and exclusive international central securities depository (ICSD) for the primary distribution of two new RMB bonds: China Construction Bank issued a RMB 1.25 billion certificate of deposit and Bank of China Hong Kong a RMB 650 million bond through Clearstream. These were the first major RMB issuances for Clearstream in 2013 following a 2012 trend: In 2012, the ICSD has supported the issuance of more than RMB 84 billions of international bonds spread over 579 new issues, an increase of more than 71 percent compared to 2011.
On 29 November 2012, Clearstream had already facilitated the primary distribution of a RMB 1 billion bond issued by CCBL Funding PLC with the China Construction Bank as guarantor. The issuance of this so-called “dim-sum” bond was significant because it was the first to take place by a Chinese bank outside of China and Hong Kong. Clearstream successfully supported the issuer and the issuing agent via its locations in Luxembourg, London and Singapore.
Whilst around 13 percent of Asian commerce is currently settled in RMB (and expected to rise to around 50 percent in the short to medium term) use of the RMB as an active currency for settling trade-related flows remains limited elsewhere. However, raising RMB funds outside of China is expected to grow in order to meet growing demand and Clearstream is using its expertise working with its partners in all major offshore RMB centres to facilitate this process.
Until currency restrictions were greatly liberalised in July 2010, only Chinese and Hong Kong banks could issue RMB-denominated bonds. This liberalisation allowed the development of a more established offshore market and the internationalisation of dim-sum bonds. In September 2010, it was accepted as a full settlement currency, making
Clearstream the first ICSD to support full RMB settlement. Clearstream was also the first ICSD to support the issuance of a RMB-denominated bond via Hong Kong. Since then, over 1,000 new issues have been launched via Clearstream.
Clearstream was set up in 1970 to provide settlement and custody services for Eurobonds. Throughout the years the company has established settlement links to dozens of local markets and settlement of trades in domestic securities – primarily European government bonds – account today for a significant portion of the ICSD business. Settlement links enable ICSD participants to settle trades with other customers in the same ICSD, with participants in the other ICSDs, or with local market participants. Clearstream has evolved from being a pure Eurobond house to holding equity, funds, structured products and commodities.
Clearstream also provides a single point of access to multiple asset classes in multiple markets. The company is moving ever closer to the markets it serves providing local, regional as well as global solutions. Clearstream has the largest ICSD settlement network covering 53 domestic markets across the world. This network also includes all Eurozone countries and links to the major emerging economies, namely Brazil, Russia, China and South Africa.
