Crédit Agricole CIB and China Construction Bank issue first fully digital Certificate of Deposit on Origin
31s October 2019
Crédit Agricole CIB helps China Construction Bank raise HKD 100mm in the first Certificate of Deposit to be fully digitally issued via Origin platform
Hong Kong – China Construction Bank via its Hong Kong branch, together with the help of Crédit Agricole CIB, has successfully raised HKD 100mm via the first fully digitally issued certificate of deposit (CD). This was the first CD to be issued digitally with all documentation automatically and electronically generated.
The entire issuance was managed on Origin, a digital platform that connects frequent borrowers and dealers in the debt markets. This follows Origin’s success in issuing the first fully digital medium term note in Europe earlier this year.
Benjamin Lamberg, Head of Credit Asia and Global Head of MTNs & Private Placements at Crédit Agricole CIB, said: “The Asian debt markets are perfectly placed to take advantage of this technology. The funding markets are skewed towards short-term financing, with borrowers issuing and refinancing much more frequently than you would typically see in Europe or the US – transaction volumes can be 10 times higher. Despite this, the documentation process is incredibly manual, with multiple termsheets and final terms manually drafted and emailed to different parties.”
Edward Smith, Head of Capital Markets Legal – Asia Pacific at Crédit Agricole CIB, said: “The key innovation for the market is the platform’s ability to generate automatically the termsheet and final terms that legally define the transaction. Unlike the commercial paper market in Europe and the US, the CD market in Asia still relies on a full set of legal documents for each transaction. Drafting these is time consuming, repetitive, cumbersome, and ripe for error. It’s beyond time for this process to be automated – and thanks to the lead of our lawyer, Jessie Huang – we are leapfrogging into best practices for safe and efficient capital market transactions.”
Harry Huang, Senior Funding Manager for China Construction Bank, said: “We were very excited to work with Crédit Agricole CIB and the Origin team on this transaction. We see this technology as another step in the path towards a modern, efficient, capital market.”
The project marks the expansion of Origin’s technology to the Asian debt capital markets, having already been deployed in Europe earlier this year. Raja Palaniappan, CEO of Origin, said: “By developing and deploying our technology within the large community of dealers and issuers we have assembled, we can ensure market-wide adoption. It’s not enough to demonstrate value on stand-alone transactions; our customers are looking for a solution that will be adopted scalably and globally. Bringing this to the short term markets and to Asia is key for this.”
Origin is a capital markets technology company connecting frequent borrowers and dealers in the international debt markets. Origin helps dealers and their teams, grow their client base, collaborate more efficiently, and automate the processes involved with fixed income issuance. Issuers use Origin to connect to more dealers, diversify their funding sources, and optimising their funding costs. Launched in January 2017, the platform is used by over 20 dealers and 80 issuers in over 50 cities worldwide. Learn more at: https://originmarkets.com
About Crédit Agricole CIB
Crédit Agricole CIB is the corporate and investment banking arm of Credit Agricole Group, the 12th largest banking group worldwide in terms of tier 1 capital (The Banker, July 2019). Nearly 8,000 employees across Europe, the Americas, Asia-Pacific, the Middle East and Africa support the Bank’s clients, meeting their financial needs throughout the world. Crédit Agricole CIB offers its large corporate and institutional clients a range of products and services in capital markets activities, investment banking, structured finance, commercial banking and international trade. The Bank is a pioneer in the area of climate finance, and is currently a market leader in this segment with a complete offer for all its clients.
For more information, please visit www.ca-cib.com