- New market-first service enables U.S. issuers to issue bonds via CMU platform to access both international and China’s onshore capital markets through the Southbound Bond Connect
- Builds on BNY Mellon’s full suite of trustee, agency and debt administration services, supporting global issuers across the financing lifecycle
HONG KONG, February 26, 2024 – BNY Mellon today announced the launch of its U.S. Withholding Tax Administration service, a market-first solution that enables U.S. issuers to tap into Hong Kong’s vibrant offshore renminbi (RMB) market through Dim Sum Bond (DSB) 1 issuances.
Developed in collaboration with the Central Moneymarkets Unit (CMU) of the Hong Kong Monetary Authority (HKMA), this unique service allows U.S. issuers to gain access to a wider pool of liquidity and benefit from lower funding costs in Hong Kong and mainland China while complying with U.S. tax withholding requirements on U.S. source income paid to foreign persons and entities. It also expands the range of offshore RMB bonds available to institutional investors from mainland China, offering them more investment opportunities.
“We are delighted to collaborate with the CMU to deliver this unique solution,” said Fangfang Chen, Head of Asia Pacific, “As investor demand for RMB-denominated opportunities continues to expand globally, this service resolved a key hurdle for U.S. issuers seeking to benefit from the new Bond Connect scheme between Hong Kong and mainland China. Our work with the CMU also underscores our shared commitment to enhance global capital markets connectivity.”
Hong Kong is the largest offshore RMB center in the world, with Dim Sum Bond issuance reaching a record RMB 343 billion in the first eight months of 2023, representing a 62% year-on-year increase. Stanley Chan, President, Central Moneymarkets Unit of the Hong Kong Monetary Authority, commented, “We are pleased to collaborate with BNY Mellon to enable issuers to leverage the Bond Connect scheme and Hong Kong’s financial infrastructure to access onshore and offshore RMB capital.”
Cécile Nagel, Global Head of Corporate Trust, BNY Mellon, added, “We are continuously expanding our capabilities to better support our global client base in issuing new debt, refinancing and securitization. With the launch of this service, U.S. issuers can now more efficiently tap into offshore and onshore bond market opportunities and institutional investor base.”
About BNY Mellon
Established in 1784, BNY Mellon is America’s oldest bank and the first company listed on the New York Stock Exchange (NYSE: BK). Today, BNY Mellon powers capital markets around the world through comprehensive solutions that help clients manage and service their financial assets throughout the investment life cycle. BNY Mellon had $47.8 trillion in assets under custody and/or administration and $2.0 trillion in assets under management as of December 31, 2023. BNY Mellon has been named among Fortune’s World’s Most Admired Companies and Fast Company’s Best Workplaces for Innovators. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. Additional information is available on www.bnymellon.com. Follow us on LinkedIn or visit our Newsroom for the latest company news.
About Central Moneymarkets Unit
The Central Moneymarkets Unit (CMU), owned and operated by the Hong Kong Monetary Authority, was established in 1990 to provide secure and efficient clearing, settlement and custodian services for Hong Kong’s multi-currency debt securities and those in international markets. Over the years, the CMU has continuously established linkages with regional and international central securities depositories to expand its issuer and investor reach globally. With the launch of Bond Connect scheme in 2017, the CMU has become a pivotal financial market infrastructure serving both onshore and offshore market participants.
