Singapore Launches Yuan-Clearing System

By FIONA LAW

HONG KONG—The two most aggressive players in the offshore yuan market—HSBC Holdings


PLC and Standard Chartered


PLC—plan to sell the first yuan-denominated bonds to be cleared in Singapore, which launched its own yuan-clearing system Monday.

HSBC plans to sell a two-year yuan bond at a yield of about 2.25%, according to a term sheet seen by The Wall Street Journal Monday.

Standard Chartered’s planned yuan bond has a tenor of three years with a roughly 3% yield, a person with knowledge of the matter said.

Both bonds, which will be benchmark in size and arranged by the banks themselves, could be sold as early as Monday. The sales will be cleared through the Central Depository (Pte) Ltd., which provides clearing and settlement services for securities in Singapore.

The launch of the yuan-clearing system in Singapore could enable freer flow of trade in the yuan, also known as the renminbi. Previously, much of the yuan activity in Singapore was handled through correspondent banks based in mainland China, or through Bank of China in Hong Kong, the main testing ground for Beijing as it internationalizes its currency.

In February, Beijing approved Industrial Commercial Bank of China Ltd.


to clear yuan trades in Singapore, which is now up against Taipei, London, Tokyo, Luxembourg and Kuala Lumpur in the fight to become the world’s second-largest offshore yuan-trading hub after Hong Kong.

Last week, DBS Group Holdings Ltd.,


Southeast Asia’s largest bank by assets, said it also plans to issue yuan-denominated bonds to be cleared out of Singapore.

Singapore Launches Yuan-Clearing System