Industrial and Commercial Bank of China (ICBC) has recently completed the first secondary market transaction of a free trade offshore bond through its overseas subsidiary, ICBC Asia. This marks a significant step by ICBC in advancing the development of the offshore renminbi bond market and injects new momentum into promoting the internationalization of the renminbi and expanding high-level opening-up.

The free trade offshore bond was issued within the China (Shanghai) Pilot Free Trade Zone, with registration and custody services provided by the Shanghai Clearing House. Both the issuer and the investor are overseas entities. Unlike previous transactions of such bonds, which primarily took place in the primary market through subscription, this transaction was executed via the domestic currency trading system of the China Foreign Exchange Trade System between ICBC Asia and its counterparty. The settlement was conducted through the Shanghai Clearing House using delivery versus payment (DVP), while the renminbi funds were transferred simultaneously via the Cross-Border Interbank Payment System (CIPS). This process enabled end-to-end straight-through processing for the trading, clearing, and settlement of the free trade offshore bond.

The successful execution of this transaction is expected to enhance the liquidity and trading activity of free trade offshore bonds, contributing to the accelerated development of Shanghai as an international financial center.

ICBC will continue to leverage its global service network and strengths in cross-border financial services to actively promote the development of the free trade offshore bond market. The bank aims to help broaden financing channels for Chinese enterprises expanding overseas and high-quality companies in Belt and Road partner countries and regions, further supporting the expansion of high-level opening-up.