Deutsche Bank AG has obtained permission to underwrite corporate bonds within China, as Beijing drives further opening of the country’s debt market to foreign participants.
In an official statement the German bank announced that it had secured approval from the National Association of Financial Market Institutional Investors (NAFMII) to underwrite onshore and offshore issues on the interbank market.
“The ability to help offshore and onshore clients issue primary debt in China provides an important facet to our full suite of capabilities,” said Werner Steinmueller, Deustche Bank Asia Pacific CEO in the statement.
Deutsche Bank joins Citigroup Inc, BNP Paribas SA, HSBC Holdings PLC, JP Morgan Chase & Co and Standard Chartered Plc on the list of foreign banks permitted to operate as corporate bond underwriters on the interbank market.
Deutsch Bank expects investment in renminbi-denominated bonds to rise to as high as 5.3 trillion yuan over the next five years.
The German bank is already a licensed market maker on the Chinese interbank market and for the Bond Connect initiative.
China expanded access to the domestic bond market a year ago with the launch of the Bond Connect initiative, allowing foreign investors to invest in debt via the special administrative region of Hong Kong.
The initiative helped to drive a 162 billion yuan increase in foreign holdings of Chinese onshore bonds during the first quarter of 2018, for a record high of 1.36 trillion yuan.