The Singapore Exchange (SGX) is collaborating with Euroclear Bank to launch a new Orchid bond structure in Singapore, combining domestic bond issuance with global distribution channels.
Based in Brussels, Euroclear Bank provides settlement and related securities services for cross-border transactions involving domestic and international bonds, equities, derivatives and investment funds.
Through the initiative, international investors will be able to purchase bonds issued by Singapore-based issuers directly on The Central Depository, which is owned by SGX, via Euroclear. Investors will benefit from real-time multi-currency delivery versus payment settlement with any counterparty within Euroclear's network.
HSBC was the arranger, custodian bank and paying agent in the setting up of the Orchid bond structure.
The addition of the Orchid bond structure allows market participants to tap SGX as a one-stop issuance, listing and distribution platform, the bourse said in its statement. SGX and Euroclear are also looking to extend the offering beyond Singapore to other regional issuers.
"We are excited to partner with Euroclear to offer issuers and investors a win-win solution, by allowing issuers to tap SGX's listing and depository capabilities, while at the same time giving global investors access to a fast-growing Asian bond market," said SGX senior managing director Lee Beng Hong, who is the head of fixed income, currencies and commodities.
Euroclear's global head of capital markets and funds services Stephan Pouyat added: "Within our ecosystem we see continued scope for this structure laying the foundation for ESG bond issuance in foreign currencies in the near future." ESG refers to environmental, social and corporate governance.
Head of global markets at HSBC Singapore Gavin Powell said the bank is "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".
Shares of SGX closed at $9.91 on Thursday, down 0.4 per cent.
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