Silk Road Bond Bridging the Financing Needs of Belt and Road Countries
Marketwired
HONG KONG, CHINA--(Marketwired - Sep 8, 2016) - Continuing the dynamic of the G20 Leadership Summit early this week, International Capital Market Association ("ICMA") and Dagong Global Credit Rating ("Dagong") co-organized a groundbreaking Summit, "Belt and Road Summit - Financing Through Silk Road Bond" ("the Summit"), in Hong Kong today. The Summit focused on Belt and Road economic growth, financing needs, and how to bridging the gap in the current system. It was agreed that the opportunities of the Belt and Road markets are immense and the ability for these countries involved, especially for those with less developed financial markets, to raise foreign funds to finance their infrastructure projects and domestic consumptions is vital to the success of the "Belt and Road" economy growth. Martin Scheck, Chief Executive of ICMA, said in his welcome remarks, that this Summit is the first step towards finding an internationally recognized means of funding for this important initiative which is trying "to bring prosperity to the many developing Asian countries along the route that lack the capacity to undertaking major infrastructure projects on their own, connecting them through a web of airport, deep water ports, fiber optic networks, highways railways, oil and gas pipelines." Guan Jianzhong, Chairman of Dagong, pointed out that "the Summit aims to discover a fundamental structure which can spur the economic growth of the Belt and Road countries."
"What we need today is to build a shared vision of growth and stability to avoid the next global collapse and ensure lasting conditions of prosperity," said Dominique de Villepin, the former Prime Minister of France. This was echoed by Mr. Guan. He further introduced the innovative concept "the Silk Road Bond ("SRB")" which in Mr. Guan's vision, should "create a new standardized asset class which has broad appeal to both issuers and investors in the international markets, and which can be scaled up to provide the volume of financing that can really make a difference."
The Summit also featured three high level panel discussions. The panels focused on the outlook for the Belt and Road countries' capital markets. The renowned panellists discussed the ability for the "Belt and Road" countries, especially for those countries with less developed financial market, to raise foreign funds to finance their infrastructure projects and domestic consumptions and how Hong Kong, with its well development capital market, could lead the development process to realize the vision. Antony Leung, former Financial Secretary of Hong Kong S.A.R., Group Chairman & Chief Executive Officer, of Nan Fung Group pointed out that "Hong Kong, with its established capital market, can be a catalyst to this very innovative Belt and Road initiative."
How Silk Road Bond will benefit the Belt and Road economies, and particulars of this innovative fund raising method were also covered by the panellists. General principles for issuance of SRB, risk allocation and investor appetite, education and support, as well as policy issues were touched upon. Amongst all these important topics, government support and policy development are identified to be most important features of SRB. Shaukat Aziz, former Prime Minister of Pakistan, pointed out "policy development of infrastructure financing by the governance of the Belt and Road countries is of optimal importance for economic growth of the Belt and Road markets."
Following the Summit, ICMA intends to work with key stakeholders including major Chinese and international banks, law firms, audit firm, and credit rating agencies, to assess the feasibility of developing Silk Road Bonds. The main areas of focus are expected to be:
Engagement with the stakeholders whose support is critical to the success of the initiative including, the Chinese authorities, authorities of other belt road countries, multilateral development banks and investors.
Agreement of a set of principles for the issuance of Silk Road Bonds.
Assessment of the risk appetite amongst investors for this asset class.
International Capital Market Association (ICMA) International Capital Market Association (ICMA) is a trade association and a unique organization that is a highly influential voice for the global capital market. ICMA represents members worldwide, who are active in the international capital market on a cross border basis; and is distinct from other trade associations in representing both the buy-side and the sell-side of the industry. ICMA has its head office in Zurich, where it was founded in 1969, with a subsidiary in London and representative offices in Paris and Hong Kong.
ICMA's market conventions and standards have been the pillars of the international debt market for almost 50 years. ICMA members include global investment banks, commercial and regional banks, brokers, private banks, institutional asset managers, pension funds, central banks, sovereign wealth funds and other institutions with a pronounced interest in the securities market, such as supranational institutions, infrastructure providers, rating agencies, leading law firms and media.
Dagong Global Credit Rating Group Dagong Global Credit Rating Group ("Dagong Group") was founded in April 2014 as a strategic turning point to meet the needs of the specific historical period.
Strategic Positioning: Base on the increasing demand, combine analytical, research, and education expertise, establish capabilities in providing high quality credit data and credit analysis, create a new consumption pattern and increase general public's awareness for credit information. Scientifically transform credit concept into real economic growth.
Development Philosophies: Commit to promote Dagong's core value and social responsibilities, strive to become an innovative credit rating agency in the internet age. Use Dagong's group synergy to create a new credit information consumption pattern, thus, assume the responsibility of the new credit information era.
Strategic Goals: Become influential, innovative leader in the credit information services arena.
Dagong Group has eleven subsidiaries, including: Dagong Global Credit Rating, Dagong Credit Information Services, and Dagong Credit Data.
Dagong aims to become a global player with its renowned domestic knowledge and over 20-year track records. Base on its deep understanding of credit economy, its forward-looking vision in the internet era, as well as its consolidated group structure, Dagong will thrive to be one of the most influential player in the global market.
