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DBS Launches Digital Bond Issuance Platform


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DBS Launches Digital Bond Issuance Platform
DBS Bank has launched a fully digital and automated fixed income execution (FIX) platform where issuers can directly connect with investors without the involvement of a bank. This is the first such platform in Asia amid digital transformation of the capital markets, the bank said yesterday.

Keppel Corporation is the first corporate issuer to have its US$1bil (RM4.15bil) Euro-commercial paper programme digitalised for issuances under the FIX Marketplace, and has appointed DBS the sole arranger and dealer of the programme.

More than US$300mil (RM1.2bil) of dealer-led bank certificates of deposit issuances have transacted on the platform with direct investor subscriptions. Phillip Securities is among investors that have onboarded onto the platform.

DBS said the FIX Marketplace aims to make capital markets access more time and cost efficient, and to develop the breadth and depth of Asian bond markets at a faster pace, thereby creating more inclusive and accessible markets for issuers.

The first version of the platform will provide issuers an interface to directly issue their own bonds into the marketplace - while maintaining the ability to execute bond transactions via dealers – and allow deals to be launched with one click.It also enables direct order taking and transparent allocation for investors on primary market bond issuances, and fully digitalises and automates documentation and primary trade confirmation generation on the platform.

Issuers and investors will also have the relevant tools and information to make more informed funding and investment decisions, said the bank. The platform will also support issuers in generating “digital bond-ready” transactions which can be listed and traded on the members-only DBS Digital Exchange (DDEx).

For the next phase of development, issuers will be able to issue self-led digital bonds which can be listed on the DDEx. This will provide corporates an alternative investor base to tap capital markets for their business and growth ambitions, said DBS.

DBS global head of fixed income Clifford Lee said: “The time is ripe for traditional ways of bond origination to make way for a more digital approach, to do what has been aspired to for so long – by taking the first step towards the creation of an independent platform that allows bond issuers efficient and effective direct access to the marketplace and bond investors.”

Keppel Corp director of group treasury Lynn Koh said: “We look forward to collaborating with DBS on issuances under the Euro-commercial paper programme on the FIX Marketplace, which enables companies like Keppel to respond swiftly to market opportunities with self-executable offerings.”

Phillip Securities head of fixed income Richmond Zhan said that the ease of access to commercial papers through the marketplace will allow investors to secure higher returns over short-term deposits.
Last month, DBS priced a S$15mil (RM46.26mil) digital bond as the DDEx’s first security token offering.

UOB this month also piloted a digital issuance of S$600mil (RM1.8bil) in perpetual capital securities by tapping Marketnode’s digital asset issuance, depository and servicing platform. The digital bond is run in parallel with the conventional issuance process.

Marketnode, led by the Singapore Exchange and Temasek, is an exchange-led digital asset venture focused on capital markets workflows through smart contracts, ledger and tokenisation technologies.
HSBC had also in April completed a digital bond issuance on Marketnode, in conjunction with a S$1bil (RM3.1bil) perpetual securities issue by Singtel.


 

Source: DBS launches digital bond issuance platform (2021, 23 June). The Straits Times. Retrieved from https://www.straitstimes.com/business/banking/dbs-launches-digital-bond-issuance-platform


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The information provided in this report is of a general nature and has been prepared for information purposes only. It is not intended to constitute research or as advice for any investor. The information in this report is not and should not be construed or considered as an offer, recommendation or solicitation for investments. Investors are advised to make their own independent evaluation of the information contained in this report, consider their own individual investment objectives, financial situation and particular needs and should seek appropriate personalised financial advice from a qualified professional to suit individual circumstances and risk profile.
The information contained in this report is prepared from data believed to be correct and reliable at the time of issuance of this report. While every effort is made to ensure the information is up-to-date and correct, Bond and Sukuk Information Platform Sdn Bhd (“the Company”) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information contained in this report and accordingly, neither the Company nor any of its affiliates nor its related persons shall not be liable in any manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any reliance thereon or usage thereof.

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