SGX Partners with Euroclear Bank to Launch Orchid Bond Structure

The newly launched service will combine Singapore’s domestic bond issuance with global distribution channels.

Singapore Exchange (SGX) announced today that it has partnered with Belgium-based financial services provider, Euroclear Bank to launch the Orchid bond structure in Singapore. HSBC acted as an arranger, custodian bank, and paying agent in the set up of the Orchid bond structure.

According to the official press release, the newly launched Orchid bond structure combines domestic bond issuance with global distribution channels. Investors around the world will be able to buy bonds issued by Singapore-based issuers directly on SGX’s wholly-owned subsidiary, The Central Depository (CDP) via Euroclear.

International investors will be able to take advantage of the real-time, multi-currency delivery versus payment (DVP) settlement with any counterparty within Euroclear’s network. Euroclear and SGX aim to expand the offering beyond Singapore to other regions.

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Commenting on the recent announcement, Lee Beng Hong, Senior Managing Director and Head of Fixed Income, Currencies and Commodities (FICC) at SGX, said: “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.”

Bond Listing

The Singapore Exchange acted as a hub for a global bond listing in Asia. More than 1,600 issuers from 66 countries listed over 6,600 securities on SGX with the total issued amount of $2.2 trillion in 26 different currencies. With the addition of the Orchid bond structure, market participants will be able to utilize SGX as a one-stop issuance, listing and distribution platform for regional issuance.

“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,” Stephan Pouyat, Global Head of Capital Markets and Funds Services at Euroclear, said.

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