HSBC, Citi get nod to underwrite China corporate debt
16 Jun 2011
The China units of HSBC Holdings and Citigroup Inc have won initial approval to underwrite corporate debt in China, clearing their way to become the first foreign banks to win the coveted licences, news reports quoting official sources said.
According to the report, China's National Association of Financial Market Institutional Investors (NAFMII), an industry association formed by the central bank to supervise the country's debt market, has given the go-ahead to the two banks to underwrite corporate debt.
However, the banks would still need to register with the People's Bank of China, the central bank, before launching operations, the sources said, adding the banks may obtain the final approval over the next two weeks.
According to analysts, the move marked a significant breakthrough for foreign banks in China.
They say the corporate debt market was one of the fastest-growing in China's financial industry and it offered huge potential for growth.
Only domestic banks in China are allowed to underwrite corporate debt, including short-term bills and medium-term notes on the interbank market.
