Clearstream has launched a new Global Issuer Hub to facilitate issuance and administration for all types of debt instruments, warrants, equities and investment funds in 46 settlement and 96 denomination currencies in both central bank (EUR) and commercial bank money. The idea is to provide one global access point, making issuances more efficient and offering a ‘one stop shop’ covering admission, distribution, and asset and advisory services.
According to Clearstream, which is launching the hub in time for the 50th anniversary of the first ever Eurobond issuance next month, by Italian motorway network Autostrade, the new launch can reach investors anywhere in the world and provides customers with end-to-end issuance services, as well as the desired reach. Exchange traded funds (ETFs), Islamic finance or Chinese currency ‘dim sum’ bonds can all be facilitated. Interestingly, the number of offshore renminbi (RMB) denominated bond issuances Clearstream processed last year saw a 71% increase compared to 2011, and the strengthen of the burgeoning Asian market is thought to be one of the ley drivers for this latest move.
The Global Issuer Hub will operate out of Frankfurt, London, Luxembourg, Prague and Singapore, with its online services accessible from anywhere. Increasing market demand for new ways to issue securities globally is cited as the key official reason for the launch of the Hub, with Clearstream’s pointing towards growth of 18% in the worldwide debt capital markets between 2008 and 2012 (from US$85 trillion to $100trn) despite the financial crisis, much of it driven by Asia and strengthened by post-crash regulatory reforms and market norms.
According to Marc Kieffer, head of issuance and distribution services at Clearstream: “The market has been right to look for more international, holistic and efficient models for securities’ issuance and today we are able to offer this in the form of our Global Issuer Hub. Issuers and investors will now be able to enjoy our global reach, local expertise worldwide and full suite of customised services over the entire issuance cycle from admission to distribution and asset servicing.”
The Hub offers users a very large investor pool via a network of 2,500 financial institutions from 110 countries. In addition, with over 50 central securities depositories (CSDs) worldwide currently connected to Clearstream, it rightly claims its Hub offers issuers an extensive distribution network accessible through one access point, be it via the Clearstream international central securities depository (ICSD) or its respective German and Luxembourg CSDs. Looking ahead, Clearstream will further extend this network when it joins the future European harmonised settlement platform TARGET2-Securities (T2S).
The Hub is also offering issuers assistance in utilising the Luxembourg regime, which has recently been implemented for dematerialised securities issued under Luxembourg law. In addition to removing the need for issuing physical global notes, the secretive new regime is said to offer a low-risk and no doubt low tax and low disclosure environment for corporate issuers and others.