China Merchants Bank Launches the United States’ First RMB Denominated Certificate of Deposit with Standard Chartered as Sole Arranger
Published: November 21, 2014
- Issuance marks the debut of RMB denominated Certificates of Deposit in New York City
- Liquidity generated will be used to support trade finance transactions in the US-China trade corridor
NEW YORK –China Merchants Bank’s (CMB) New York branch has launched the United States’ first Renminbi (RMB) denominated certificate of deposit (CD) from its new global CD program with Standard Chartered acting as sole arranger for the program and debut issuance. Proceeds from the offering will be used to finance RMB denominated trade between the US and China.
The issuance offers U.S. domiciled institutional investors a new way to invest in RMB denominated assets. Previously, participation from this investor base was limited to select offshore RMB bond and discount note issuances which were registered with the SEC or issued by supranationals (such as the International Finance Corporation).
For its program launch, CMB’s New York branch issued a CNH 50 million one-month CD. Tenors of CDs issued from the program, however, can range from one week to several years providing CMB flexibility to meet its funding requirements.
"We are extremely proud to issue this landmark deal which offers us an opportunity to tap the rising global RMB liquidity pool," states China Merchants Bank New York Branch. "As the use of RMB continues to increase, we are confident that the program will support the growing needs of our clients."
“We are pleased to be part of this milestone in the U.S. market and look forward to helping more of our clients benefit from RMB internationalization,” says Caroline Owen, Regional Head of RMB Solutions, Americas, Standard Chartered Bank. “Through greater awareness, I am confident that more corporates will begin integrating the RMB into their operations -- such as for trade settlement -- to deliver greater shareholder value. As the strategic use of RMB expands in the U.S., New York’s status as a leading financial hub will also grow from strength to strength.”
Research on the offshore RMB has indicated that RMB denominated payments in the US have been growing. While London remains the biggest centre for cross-border Renminbi payments (after Hong Kong), the US is quickly catching-up with Singapore for third place.