In August the Shanghai-based Asian Infrastructure Investment Bank (AIIB) issued a $300 million Digitally Native Note (DNN) using Euroclear‘s D-FMI platform. A recent $200 million tap issuance brings the total digital bond amount to $500 million. The issuance is part of the AIIB sustainable bond program.
We believe the extension ranks the AIIB bond amongst the top five largest digital bonds issued globally. KfW leads with the two largest digital bonds. The German bank expanded its €4 billion June issuance to €5 billion in September and launched another €3 billion digital bond this month. In third place is Hong Kong’s $756 million sovereign digital green bond issued in February, which technically was multiple issuances in different currencies. At the time, the Hong Kong issuance was the largest. Ledger Insights Research plans to publish data on digital bond issuance in the near future.
For the AIIB tap, the joint lead managers were BMO Capital Market and Citi, the same as for the initial issuance. Citi was also the issuing and paying agent and the bond is listed on the Luxembourg Stock Exchange.
To ensure liquidity, the digital bond issuance platform D-FMI was integrated with the conventional settlement system. This means that investors don’t need to be up to speed with DLT to buy the bond. The SIX Digital Exchange (SDX) was the first to take this step with its bond issuance platform.
Meanwhile, Euroclear’s D-FMI platform is based on R3’s Corda enterprise blockchain. More details about the AIIB and its activities are available in the August bond issuance report.
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