Brussels/Tokyo, 17 December 2020 – Euroclear Bank, the Brussels based international central securities depository (ICSD), in collaboration with the Japanese capital market have launched a new asset class, Origami bonds.
Origami bonds are foreign currency denominated Japanese local bonds issued by domestic market participants and then distributed and settled in real time multi-currency delivery vs. payment (DVP) within Euroclear Bank. With these Origami bonds, Japanese issuers are now able to gain direct exposure to a wider foreign investor base, reaping the benefits of a greater liquidity pool and improved cost efficiencies.
Since the launch, three issuances have already occurred through Euroclear Bank. Japan’s seventh largest city, Kobe was the first issuer to utilise the Origami bond structure; next was Japan’s second largest city Yokohama and the third issuance was made by the Shizuoka Prefecture. Goldman Sachs served as lead manager for Kobe and Yokohama City, and Nomura for the Shizuoka Prefecture.
Toshinori Akaeda, Manager, Finance Bureau, Kobe City commented: “We introduced the first-ever Euroclear settled foreign currency domestic bond, in response to a growing need for settlement aligned to global standards. We succeeded in issuing the largest foreign currency domestic bond at the time, with participation of several new investors. The introduction of the Origami bond contributed to the expansion of the investor base of Kobe City’s bonds as well as the diversification of its funding sources. Furthermore, we see the new investment option increasing the potential of Japan’s domestic bond primary market.”
Valerie Urbain, CEO, Euroclear Bank, added: “We are very excited by the level of interest that we have seen in the Origami bond roll out. Our extensive experience in Japan has deepened our understanding of ways to deliver new and innovative services to benefit the market. In our role as a financial market infrastructure, we see great opportunities to expand and improve our global service offering by developing value-added solutions for connecting issuers and investors efficiently and effectively.”