On July 16, 2026, the Shanghai Clearing House successfully supported Shanghai Pudong Development Bank Co.,Ltd. in issuing offshore bonds using the Magnolia issuance model. The issuance size was 3 billion yuan, with a three-year tenor and a coupon rate of 1.68%, representing a significant tightening of 52 basis points from the initial price guidance.
The issuance attracted participation from over 70 domestic and international investors, covering a diverse range of types including foreign financial institutions in Hong Kong, Chinese overseas institutions, and non-banking financial institutions. It reached investors from mainland China through the Southbound Bond Connect, as well as from regions including Hong Kong, Macau, Singapore, South Korea, France, and the United Kingdom. Market response was enthusiastic, with peak oversubscription exceeding 7.7 times. This set new records for the Magnolia issuance model in terms of highest peak oversubscription, widest investor coverage, and most diverse investor types. It also marked the first time offshore bonds issued under this model were simultaneously listed on both the Hong Kong Stock Exchange and the Singapore Exchange, signifying a new level of international recognition, scale aggregation effect, and business innovation for the model.
How the Magnolia Model Operates
Guided by the People's Bank of China, the Magnolia issuance model designates the Shanghai Clearing House as the central securities depository. By establishing connectivity with international infrastructures, represented by Euroclear Bank, it provides a secure, efficient, and self-controllable channel for offshore market bond financing. While maintaining maximum compatibility with mature international custody and settlement systems, the model simultaneously introduces an investor information transparency mechanism to strengthen risk prevention and control. This initiative is a significant move by the Shanghai Clearing House to support the construction of a renminbi overseas asset pool and advance the internationalization of the Chinese currency. Since its implementation, the model has continuously improved its full-chain issuance services, covering multi-currency pricing, multi-market listing, issuance settlement, lifecycle management, and tax credit processing. The total issuance volume of offshore bonds under the Magnolia model has now exceeded 30 billion yuan equivalent. Issuers comprehensively cover various financial institutions and non-financial enterprises, and the model effectively reaches mainstream international investors in the Chinese offshore bond market.
Future Development Plans
Moving forward, the Shanghai Clearing House will continue to focus on serving the strategic goals of renminbi internationalization and the development of Shanghai as an international financial center. It plans to deepen and expand the interconnection of cross-border financial infrastructure, enrich its product and service systems, strengthen market coordination, and jointly foster a robust ecosystem for the Magnolia issuance model.
Comments