January 30, 2018 / 10:21 AM / in 10 months

Shanghai Stock Exchange lists its first U.S. dollar debt instrument

SHANGHAI, Jan 30 (Reuters) - The Shanghai Stock Exchange listed its first fixed-income product denominated in a foreign currency on Tuesday, as the bourse seeks to diversify its offerings to Chinese investors.

The U.S.-dollar denominated asset-backed securities (ABS) were backed by income-generating assets of China Aircraft Leasing Group Holdings Ltd (CALC), according to a listing statement posted on the exchange’s website.

The ABS issuance marks a breakthrough for the Shanghai Stock Exchange in the fixed-income space. In equities, the bourse trades so-called “B-shares”, which are denominated in the U.S. dollar.

The aircraft leasing firm said the ABS, whose amount totals $171.33 million, is structured in eight tranches with the longest product maturity period of 7.65 years. All tranches are rated AAA by China Cheng Xin International.

CALC said the ABS holds significance in attracting U.S. dollar investment in China and in reducing outflows of the currency.

The dollar ABS should also help limit foreign currency risks, as aircraft purchases are denominated in dollars.

The ABS is managed by Huatai Securities Asset Management Co. (Reporting by Samuel Shen and John Ruwitch; Editing by Richard Borsuk)

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