JPMorgan Wins China Approval to Underwrite Corporate Bonds
JPMorgan Wins China Approval to Underwrite Corporate Bond Sales
(Bloomberg) -- JPMorgan Chase & Co., the biggest U.S. bank, said it won approval to underwrite corporate bond sales in China’s interbank market, allowing it to challenge dominance by domestic players in the world’s third-largest note market.
JPMorgan is the first U.S. bank to receive the license from the National Association of Financial Institutional Investors, known as NAFMII, the New York-based lender said in a statement on Monday. China had 43.7 trillion yuan ($6.4 trillion) of bonds outstanding at the end of 2016 with the interbank note market accounting for over 90 percent, according to the statement, which cited data from China Central Depository & Clearing Co.
NAFMII last month gave JPMorgan and BNP Paribas SA licenses enabling them to underwrite debt financing instruments issued by non-financial entities, including commercial paper, medium-term notes and other instruments approved by authorities, the regulator had said in statements.
While Chinese President Xi Jinping spoke out against protectionism last month as he rebutted policies advocated by U.S. President Donald Trump, he has taken only gradual steps to open access to the Asian nation’s debt markets. Two decades after its creation, the Chinese local bond market is still dominated by state-owned lenders.
All corporate bond issuance jumped 68 percent last year to 23.4 trillion yuan, according to data compiled by Bloomberg.
JPMorgan in December reached an agreement with First Capital Securities Co. to sell its 33.3 percent stake in their securities joint venture. The U.S. bank’s businesses in China include corporate banking and stakes in a fund manager and in a commodities futures joint venture, according to the bank’s China website.
To contact Bloomberg News staff for this story: Jun Luo in Shanghai at jluo6@bloomberg.net. To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Marcus Wright at mwright115@bloomberg.net, Russell Ward
With assistance from Jun Luo