SGX, Euroclear Bank launch Orchid bond structure

The Orchid bond structure will provide easier access to Singapore bonds for international investors.

The Singapore Exchange has partnered with Brussels-based Euroclear Bank to provide global distribution channels for domestic bond issuances.

“This offering will deepen the bond market’s liquidity pool and has the potential to significantly expand the issuers’ investor base,” Lee Beng Hong, senior managing director and head of fixed income, currencies and commodities for SGX, said in a statement on 19 February.

SGX has more than 6,600 securities listed from 1,600 issuers across 66 countries in its platform. This amounts to an approximate US$2.2 trillion.

The Orchid bond structure will provide access to these bonds directly through SGX or through Euroclear's The Central Depository.

“Within our ecosystem, we see continued scope for this structure laying the foundation for ESG bond issuance in foreign currencies in the near future,” said Stephan Pouyat, global head of capital markets and funds services for Euroclear.

Financial institution HSBC is the arranger, custodian bank, and paying agent for this venture.

SGX and Euroclear are looking into extending the service to other regional issuers.