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HSBC Holdings Plc was left off the list of banks organizing the sale of Chinese sovereign debt for the first time since the nation returned with big annual deals in 2017.
Planned for this week, the $ 6 billion sale will be organized by 13 banks, including four Chinese lenders and foreign banks such as Bank of America Corp., Citigroup Inc. and Standard Chartered Plc, according to people familiar with the matter who asked not to be identified when discussing private information. The Finance Ministry did not immediately respond to a fax seeking comment.
The reason for HSBC’s omission was unclear, but the London-based lender’s relationship with China has grown increasingly strained. The bank has been criticized by the Chinese media for its role in the US investigation of Huawei Technologies Co. and criticized for not coming out quickly enough in support of Hong Kong’s new security law.
Last month, the ruling Communist Party’s Global Times newspaper reported that the bank, which views Hong Kong as its largest market, could be included in a list of “untrustworthy entities” that aims to punish companies that damage the economy. China’s national security.
A Hong Kong-based HSBC spokesperson said the bank would not comment on specific deals. “As a leading foreign bank in issuing G3 debt in mainland China, HSBC is committed to supporting our clients and opening up China’s capital markets,” he said, adding that “we have a good working relationship with” the Ministry. Finance.
China is key to HSBC CEO Noel Quinn’s plans to revive the lender’s fortune. This year, Quinn is accelerating a reorganization of its global operations, turning even more to Asia as its European operations lose money and it battles bad debt and low interest rates. The bank’s shares hit a 25-year low last month in Hong Kong, partly on concerns that its expansion plans in China could be in jeopardy.
The stock fell 3.7% at 10:13 a.m. in Hong Kong, extending this year’s slide to 50% and making it the worst performer on the Hang Seng benchmark.
HSBC has acted as one of the organizers of China’s dollar bond deals every year since China returned to that market in 2017, according to data compiled by Bloomberg. Last year, he also helped organize the sale of Euro-denominated bonds, the first sale of its kind in 15 years. HSBC ranks second in the ranking of Chinese offshore debt deals so far this year, according to data compiled by Bloomberg.
The lender has had other setbacks, losing its coveted spot last year by pricing a new Chinese benchmark rate and was unable to obtain a license to underwrite all kinds of corporate notes on the Chinese interbank bond market.
– With the help of Ina Zhou, Helen Sun, Alfred Liu, Xize Kang, Steven Yang and Wei Zhang
(Updates with actions in the seventh paragraph.)