HSBC Ltd, Europe's largest lender by market value, plans to make its debut on Taiwan's offshore bond exchange by rolling out a batch of bond products traded in US dollars by the end of the first half, the bank said yesterday.
This would make it the third bond issuer on the foreign currency-denominated capital market, which has been promoted aggressively by the Financial Supervisory Commission since its inception two years ago.
The commission has been encouraging interested financial institutions to participate in the fledgling offshore bond market.
"We plan to launch a batch of bonds in the offshore bond market by the end of the second quarter," said John Li (
NT$8.6 billion (US$260.8 million) of the fixed-income product will be issued, he said.
Li declined to reveal the possible interest rate of the bonds, saying only that it would depend on the market at that time. The bank will lodge the application with the financial regulator for approval very soon, he added.
The nation's foreign currency-denominated bond market, named Formosa Bond, began business about five months ago, when the first batch of products, worth US$250 million, were issued by Deutsche Bank and started trading on Nov. 1.
BNP Paribas will become the second issuer of this type of bond, with bonds issued for as much as A$500 million (US$386.8 million) to complete fundraising by the end of this month at the earliest. BNP Paribas' bonds may provide a coupon of up to 6 percent, higher than Deutsche Bank's 4.85 percent.
While the market in offshore bonds is still developing and small in size, HSBC's Li said he was not particularly worried about any liquidity problems and believed that with more participation, the market would grow more active.
Between Nov. 1, and Feb. 13, outright trading of foreign currency-denominated bonds amounted to US$24.56 million and conditional trading totaled US$553.79 million, the commission's latest data said.
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