HSBC Holdings Plc (HSBA), Europe’s biggest
bank by market value, is planning to sell yuan-denominated bonds
listed in London, according to an e-mailed media release from
the bank today.

The sale will be the first time a European bank has issued
so-called Dim Sum bonds listed in the city, according to data
compiled by Bloomberg. It is the first yuan note to be issued
outside of China, including Hong Kong, according to the release.

There are currently more than 109 billion yuan ($17.3
billion) of customer and interbank deposits in the Chinese
currency in London, according to a policy paper prepared by
research firm Bourse Consult and released yesterday. China,
which is expanding the use of its currency overseas, designated
Hong Kong as an offshore center for trading after allowing trade
settlements using the currency, also known as the renminbi, in
2009.

“London is the world’s most pre-eminent financial center.
We are not prepared to let anyone steal a march on us when it
comes to new products and new markets,” U.K. Chancellor of the
Exchequer George Osborne said in London today. “In the coming
decades it is China that will act as a powerhouse of the world
economy,” he said, adding that he hopes Chinese companies can
also sell yuan bonds in London.

HSBC is marketing the three-year notes to yield about 3
percent to 3.25 percent, a person familiar with the matter said
today, asking not to be identified because the details are
private. The London-based bank is the top underwriter of Dim Sum
bonds in Hong Kong this year, according to data compiled by
Bloomberg.

“This represents another step in London’s development as a
premier international trading center for the renminbi and is an
early sign of the huge potential this market represents,”
Stuart Gulliver, chief executive officer of HSBC, said in the e-
mailed release.

The Hong Kong Monetary Authority announced in January that
it plans to lengthen trading of the yuan by five hours by June,
allowing London-based institutions the opportunity to expand
their participation in the market outside China.

“European investors have become increasingly active in the
Dim Sum market,” Steve Wang, the head of fixed-income research
in Hong Kong at BOCI Securities, a unit of Bank of China Ltd.,
said. “The listing gives some symbolic sign London has the
capacity and the desire to serve the renminbi business.”

To contact Bloomberg News staff for this story:
Henry Sanderson in Beijing at
hsanderson@bloomberg.net

To contact the editor responsible for this story:
Shelley Smith at
ssmith118@bloomberg.net