UOB, ICBC complete Singapore’s first offshore RMB bond-pledged repurchase agreement

This marks an additional means of cash liquidity for local businesses.

The Industrial and Commercial Bank of China (ICBC) Singapore revealed that it has completed Singapore’s first offshore RMB bond-pledged repurchase agreement, or repo, involving the use of RMB pledged bonds, using offshore RMB liquidity as collateral.

The transaction marks another breakthrough for Singapore as a leading offshore RMB hub, with the introduction of a new financing avenue now available to offshore RMB market participants in the city-state.

The repo, completed between ICBC Singapore and United Overseas Bank (UOB), was made on a two-year offshore RMB financial bond issued by the Agricultural Development Bank of China, with an issuer and debt rating of Aa3 on Moody's.

"As an additional means of cash liquidity for market participants on the back of interbank lending and swaps, offshore RMB bond-pledged repos add diversity to our local RMB product landscape, firmly establishing Singapore as an offshore RMB hub of choice," said Zhang Weiwu, General Manager of ICBC Singapore.

"This also boosts the liquidity of offshore RMB bonds, which is crucial in driving the development of the offshore RMB market, and ultimately the internationalisation of the RMB," he added.