China Merchants Bank’s (CMB) New York branch has launched the US’ first renminbi denominated certificate of deposit (CD) from its new global CD programme with Standard Chartered acting as sole arranger for the programme and debut issuance. Proceeds from the offering will be used to finance renminbi denominated trade between the US and China.

 

The issuance offers US-domiciled institutional investors a new way to invest in renminbi denominated assets.  Previously, participation from this investor base was limited to select offshore renminbi bond and discount note issuances which were registered with the SEC or issued by supranationals (such as the International Finance Corporation).

 

For its programme launch, CMB’s New York branch issued a CNH50 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.

 

Caroline Owen, regional head of renminbi solutions, Americas, Standard Chartered, says: “Through greater awareness, I am confident that more corporates will begin integrating the renminbi into their operations -- such as for trade settlement -- to deliver greater shareholder value. As the strategic use of renminbi expands in the US, New York’s status as a leading financial hub will also grow from strength to strength.”

 

Research on the offshore renminbi has indicated that renminbi 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.