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SGX and Euroclear Bank team up to launch Orchid bond structure



Asian international fixed income marketplace Singapore Exchange (SGX) and Brussels-based international central securities depositary (ICSD), Euroclear Bank announced the launch of the Orchid bond structure in Singapore, combining domestic bond issuance with global distribution channels.

Lee Beng Hong, Senior Managing Director, Head of Fixed Income, Currencies and Commodities (FICC), SGX, said:

Lee Beng Hong, SGX
Lee Beng Hong
Source: LinkedIn

We are excited to partner with Euroclear to offer issuers and investors with a win-win solution, by allowing issuers to tap into SGX’s listing and depository capabilities, while at the same time giving global investors access to a fast-growing Asian bond market. Asia is home to some of the world’s fastest growing economies and we continue to see issuers tapping into debt capital markets. This offering will deepen the bond market’s liquidity pool and has the potential to significantly expand the issuers’ investor base.

International investors will be able to buy bonds by Singapore-based issuers directly on SGX’s wholly-owned subsidiary, The Central Depository (CDP) through Euroclear. They will benefit from real-time, multi-currency delivery versus payment (DVP) settlement with any counterparty within Euroclear’s network. SGX and Euroclear plan to extend the offering beyond Singapore to other issuers.

SGX

SGX has listed more than 6,600 securities by over 1,600 issuers from 66 countries with total of US$2.2 trillion in issued amounts in 26 currencies. Orchid bond structure allows market participants to use SGX as a one-stop issuance, listing and distribution platform for regional issuance.

Stephan Pouyat, Global Head of Capital Markets and Funds Services Euroclear, added:

Stephan Pouyat, Euroclear
Stephan Pouyat
Source: LinkedIn

We are excited by the opportunities now available to local Singaporean issuance and foreign investors through the Orchid bond structure which will widen the market’s investor base. This launch continues the successful momentum we have seen in the Asia region over the past year for this type of tailored solution. Within our ecosystem we see continued scope for this structure laying the foundation for ESG bond issuance in foreign currencies in the near future.

HSBC served as arranger, custodian bank and paying agent to both, SGX and Euroclear, in the setting up of the Orchid bond structure.

Gavin Powell, Head of Global Markets, HSBC Singapore, commented:

Gavin Powell, HSBC
Gavin Powell
Source: LinkedIn

Current market infrastructure must adapt to keep pace with a highly digitised and international investor community. Technology is the key to unlocking greater market access. We are excited by the possibilities Orchid bonds will offer issuers, who are seeking diversified funding sources and deeper liquidity pools, and for international investors hungry to pursue wider investment options. HSBC is pleased to have supported SGX and Euroclear in taking this step forward; another demonstration of collaboration enabling greater opportunities.


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SGX and Euroclear Bank team up to launch Orchid bond structure

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