Bank of China London establishes debt center in localization drive

Bank of China London is going all-out with its localization initiative, with the 87-year-old branch announcing the establishment of a new debt center, which adds to its syndications and commodities centers that oversee Europe and the Middle East.

The Debt Capital Markets center in London, which is responsible for the issuance, underwriting, syndication and trading of fixed income securities in the region, lets BOC enhance its global reach and keep pace with Chinese firms' "going out", the bank says.

"The DCM center relies on the advantages of London as an international financial hub and the long-term local operation of the London branch," said a spokesman.

The launch of the center came as Bank of China, one of China's 'Big Four' lenders, saw a string of debt issuance in Europe. In June, when China's Finance Ministry issued 3 billion yuan of bonds in London, the first of its kind by the ministry, the branch was a joint global coordinator, with HSBC.

In September, Poland became the first European country to issue government debt in China's mainland bond market, raising 3 billion yuan. BOC and HSBC are joint book-runners and lead underwriters.

The growth is expected to add to the BOC's titles, including an "established" commodity bank within the city, according to the London branch.

The BOC branch announced turnover of its commodities business has reached $30 billion since the inception of a commodities center two years ago.

"London has a mature and prosperous commodity trading environment, with established capital markets, legal environment and talent pool," said the spokesman.

The commodities center has made significant breakthroughs in structured trade finance, among which was a completed $2 billion deal to finance national oil companies in Oman, Kazakhstan and Brazil.

"Such layout is part of BOC's internationalization strategy to support Chinese companies' outbound expansion and develop a stronger foothold in the global commodity market," he said.

The BOC has become the first Chinese bank to join the LME Clearnet, co-launch a renminbi-denominated futures product, and accept renminbi collaterals via BOCI Global Commodities.

Among the three arms, the BOC's syndications center, which is the longest standing, reported it has provided financing worth several billion US dollars to customers beyond China involved in more than 40 projects.