You are here: Home » International » News » Markets
Business Standard

HSBC Holdings is left off first china dollar bond deal since 2017

Planned for this week, the $6 billion sale will be arranged by 13 banks, including four Chinese lenders and foreign banks such as Bank of America Corp., Citigroup Inc. and Standard Chartered Plc

HSBC Holdings


HSBC Holdings Pic, Hong Kong, Europe
People walk past a major branch of HSBC at the financial Central district in Hong Kong

Plc was left off the list of banks arranging China’s sovereign dollar debt sale for the first time since the nation returned with big annual deals in 2017.

Planned for this week, the $6 billion sale will be arranged by 13 banks, including four Chinese lenders and foreign banks such as Bank of America Corp., Citigroup Inc. and Standard Chartered Plc, according to people familiar with the matter who asked not to be named discussing a private information. The Ministry of Finance didn’t immediately respond to a fax seeking comment.

The reason for HSBC’s omission was unclear, but the London-based lender’s relationship with China has become increasingly fraught. The bank has been blasted by Chinese media for its role in the U.S. investigation of Huawei Technologies Co. and criticized for not coming out fast enough in support of Hong Kong’s new security law.

Last month, the ruling Communist Party’s Global Times newspaper reported that the bank, which counts Hong Kong as its biggest market, could be put on an “unreliable entity” list that aims to punish firms that damage China’s national security.

A Hong Kong-based spokesman for HSBC said the bank won’t comment on any specific deals. “As the leading foreign bank for G3 debt issuance in mainland China, HSBC is committed to supporting our clients and the opening up of China’s capital markets,” he said, adding “we have a good ongoing working relationship with” the Ministry of Finance.

China is key to HSBC Chief Executive Officer Noel Quinn plans to revive the lender’s fortunes. Quinn is this year hastening a shakeup of its global operations, pivoting further into Asia as its European operations lose money and it struggles with ballooning bad debt and low interest rates. The bank’s shares hit a 25-year low last month in Hong Kong in part on concerns its plans to expand in China could be endangered.

HSBC has acted as one of the arrangers for China’s dollar bond deals each year since China came back to that market in 2017, according to data compiled by Bloomberg. Last year, it also helped arranged a sale of China’s euro-denominated notes, the first such sale in 15 years. HSBC ranks second in the league table for offshore Chinese debt deals so far this year, according to Bloomberg-compiled data.

The lender has had other setbacks, losing out last year on coveted spot in pricing a new Chinese benchmark rate and failing in a bid to get a license to underwrite all types of company notes in the Chinese interbank bond market.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, October 14 2020. 01:43 IST