The international central securities depositories (ICSDs) Clearstream Banking and Euroclear Bank have appointed China Construction Bank (Asia) as common depository, safekeeper and service provider to support their global Eurobonds issuance model.

CCB (Asia) applied to, and successfully passed, the recent common depository qualification process and is expected to start its common depository service operations by mid-2020. The bank’s transaction banking business offers comprehensive and customized agency and fiduciary solutions to support the full spectrum of capital market, asset management and fund industry transactions.

The two European ICSDs act as the central hub of issuance and deposit for Eurobonds and work with a number of large financial institutions acting as common depositories to support issuers across the globe. Issuers benefit from greater investor reach by leveraging the international client bases and multi-currency model of the ICSDs. This issuance model is supported by an interoperable link allowing clients to settle cross-border transactions seamlessly throughout the day, thereby increasing the liquidity available to market participants.

The geographic extension of the network demonstrates the attractiveness of the Eurobond model for Asia-Pacific (APAC) issuers. Leveraging Asian operations of common depositories facilitates primary market activities, including syndicated distributions, from the start of the business day in Asian markets, allowing for a more efficient use of cash and securities. Likewise, it allows a closer connection to the APAC issuance and investor communities for a more efficient servicing of the securities throughout their life cycle.

“CCB (Asia)’s aim is to broaden the Eurobond market to reach more APAC market participants – especially new issuers and investors from the People’s Republic of China,” says Alan Lai, head of transaction banking at CCB (Asia). “As a leading PRC bank, we are ideally placed […] to better serve PRC market participants in the same language and time zone and are honoured to be the first PRC bank appointed as common depositary.”