Singapore Exchange (SGX) has completed its first digital bond issuance on its digital asset issuance, depository and servicing platform.
The issuance, issued in collaboration with HSBC Singapore and Temasek, successfully replicates a $400 million 5.5-year public bond issue and a follow-on $100 million tap of the same issue by Olam International.
The digital bond marks another milestone in SGX’s use of digital asset technology by streamlining processes for issuers, underwriters, investors and ecosystem participants across primary issuance and asset servicing. The bond is also a first in Asia for a syndicated public corporate bond.
The bond and its distributed workflows for issuance and asset servicing over the bond’s lifecycle was modelled using DAML, the smart contract language created by Digital Asset.
The digital bond used HSBC’s on-chain payments solution which allows for seamless settlement in multiple currencies to facilitate the transfer of proceeds between the issuer, arranger and investor custodian.
“We are very excited that this collaboration with HSBC and Temasek has led to the successful completion of the first digital syndicated public corporate bond in Asia. Debt capital markets globally are characterised by deeply engrained legacy systems and processes which can be made faster, more accurate and efficient with this new technology,” says Lee Beng Hong, senior managing director, head of fixed income, currencies and commodities (FICC) at SGX.
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“DLT and smart contracts are rapidly evolving technologies, and our vision is to fully digitalise the end-to-end corporate bond issuance and asset servicing process. We look forward to playing a part in strengthening the fixed income market infrastructure of Singapore, Asia’s fixed income hub for bond issuers,” Lee adds.
As at 12.44pm, shares in SGX are trading 4 cents higher, or 0.5% up, at $8.65, while shares in Olam International are trading flat at $1.32.
