CGS-CIMB and iSTOX have announced the launch of a $150-million digital commercial paper programme.
Commercial papers are short-term corporate debt. They form a US$1 trillion ($1.33 trillion) market in the US and are fast gaining momentum in Asia.
The programme, which is offered in the form of digital securities, offers investors interest rates that’re higher than bank fixed deposits.
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This is the first in a new product line of digital commercial papers by iSTOX. The first tranche of the programme has already been over-subscribed.
According to iSTOX, commercial papers represent the “next rung of the ladder” in terms of yield for investors.
“This is the first commercial paper programme we have done in digital securities form, and it allows us to tap an alternative source of funding and a wider spectrum of investors. In working with iSTOX to launch this programme, we were pleasantly surprised that it was completed in half the time a traditional issuance would usually take,” says CGS-CIMB CEO Carol Fong.
iSTOX’s CCO Choo Oi Yee adds, “CGS-CIMB as an issuer was able to realise the maximum benefits of digital securities because they chose a 100% digital route, with no traditional issuance carried out alongside it. This significantly reduced the need to work with multiple intermediaries, which made the issuance faster and more cost efficient.
Taurus Point Capital was the adviser to CGS-CIMB for this issuance.
