Luxembourg Becomes First European Exchange to List a Yulan Bond
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Loading... - Alessia Abato
- 25 Mar 2025
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The Luxembourg Stock Exchange (LuxSE) has successfully listed Orient Securities Company Limited's (DFZQ) EUR 100 million Yulan bond on its Euro MTF market, making it the first European exchange to admit this unique asset class for trading. This achievement marks a pivotal moment in the integration of Chinese financial instruments into global markets.
Yulan bonds, issued through the Shanghai Clearing House (SHCH), are specifically designed to connect Chinese issuers with global investors. The name "Yulan" is derived from the yulan flower, the official flower of Shanghai, where this bond type was first introduced. The inaugural Yulan bond was issued by the Bank of China in 2021, and since then, this innovative financial instrument has gained traction as a means for Chinese entities to access international capital markets.
Lu Weiming, President of Orient Securities Company Limited, expressed gratitude to LuxSE, SHCH, Euroclear Bank, and the supportive investors, stating, “The listing of the first Euro-denominated Yulan Bond marks a milestone in DFZQ’s pioneering efforts toward further financial market opening-up and high-level development in the bond market.” He emphasized the importance of this development in the context of China’s 14th Five-Year Plan.
Yulan bonds represent an offshore bond issued by Chinese entities, settled exclusively through Euroclear Bank in Brussels. This structure facilitates cross-border cooperation between SHCH and Euroclear Bank, allowing Chinese domestic entities to tap into international capital markets. The primary goal of Yulan bonds is to enhance investment flows between international investors and Chinese issuers, thereby expanding financing options for Chinese companies.
Mr. Wang Weiqiang, Deputy General Manager of SHCH, highlighted the significance of this listing, stating, “This successful listing proves that Yulan bonds are in line with international market regulation and practice, and will help improve market liquidity of Yulan bonds and advance its price discovery function.” He noted that SHCH will continue to optimize the business mechanisms of Yulan bonds in collaboration with market infrastructure and institutional partners.
The successful listing of DFZQ’s Yulan bond on LuxSE was made possible through a collaborative effort involving LuxSE, SHCH, Euroclear Bank, and the issuer. This partnership provides international investors with a new opportunity to trade Chinese bonds on LuxSE’s market, with trade settlement occurring within Euroclear Bank’s environment. Philippe Laurensy, CEO of Asia Pacific at Euroclear, remarked, “This listing represents a significant achievement for our Yulan bond structure. Collaborating with key partners enables us to offer a new investment route into China.”
For over 40 years, LuxSE has served as the preferred European listing venue for Chinese issuers seeking to access international capital markets. The listing of DFZQ’s Yulan bond further solidifies LuxSE’s role as a crucial infrastructure in bridging the gap between Chinese and international capital markets. This development reaffirms LuxSE’s commitment to contributing to the growth of China’s bond market on the global stage.
Earlier this year, LuxSE also welcomed its first Panda bond, issued by the Asian Infrastructure Investment Bank. Panda bonds are CNY-denominated bonds issued by non-Chinese entities in China’s onshore bond market, available to both onshore and offshore investors. With the addition of Yulan bonds to its diverse range of securities, LuxSE continues to enhance its offerings for global investors.
Arnaud Delestienne, a member of LuxSE’s Executive Committee, expressed pride in being chosen by Orient Securities to facilitate the listing of its Yulan bond. He stated, “We are proud to be the first European exchange to offer the opportunity to trade in this unique asset class. We applaud Orient Securities for its work, and Shanghai Clearing House and Euroclear Bank for their commitment to our shared vision of a truly international and united capital markets ecosystem.”
This landmark listing not only opens new avenues for investment but also strengthens the ties between Chinese and European financial markets, paving the way for future collaborations and innovations in the global financial landscape.
