Digital Securities: Singtel, UOB and ADDX Price Singapore’s Largest Foreign Currency Digital Bond

ADDX, a full-service capital markets platform with Monetary Authority of Singapore (MAS) licenses for the issuance, custody, and secondary trading of digital securities, along with Singtel and UOB have priced Singapore’s largest foreign currency digital bond, to date.

Digital bonds, or tokenised bonds, are issued using blockchain and smart contract technology in order to eliminate manual processes.

According to a company statement, the USS $100 million, five-year digital Sustainability-Linked Bond (SLB) is a partnership by Singtel’s wholly-owned subsidiary, Singtel Group Treasury (SGT), with UOB and ADDX.

The digital SLB will be drawn down under SGT’s existing S$10 billion Euro Medium Term Note Programme, guaranteed by Singtel. The SLB will carry a US$ fixed coupon rate of 3.56% per annum and will mature on 27 April 2027. The net proceeds from this issue will be applied by SGT to fund its ordinary course of business. The bond will be issued on 27 April 2022.

Arthur Lang, Singtel Group Chief Financial Officer, issued the following comment on the digital security:

“Singtel’s first digital sustainability- linked bond reaffirms our commitment to sustainability and to bring the benefits of digitalisation to everyone. Directly linking our fund-raising efforts to the group’s environmental sustainability targets makes it clear we take our commitment to sustainability seriously. And through technologies such as blockchain, we hope to pave the way to democratise funding, giving a more diverse group of investors the opportunity to participate in Singtel’s growth, and supporting the digitalisation of our financial ecosystem.”

Frederick Chin, Head of Group Wholesale Banking and Markets, UOB, said the market is now trending towards asset tokenisation adding there is increasing interest from clients:

“Singtel’s move to tokenise its entire US$100 million sustainability- linked bond issuance shows that like-minded issuers are keen to tap the benefits of blockchain technology for greater security and smart contracts for better efficiency. Being at the forefront of providing progressive financial solutions, UOB is committed to collaborating with industry partners such as ADDX to support our corporate clients to draw on this space for their funding- raising needs and enjoy the benefits of asset tokenisation.”

Oi-Yee Choo, ADDX CEO explained that digital securities now play a vital role in climate action.

“When applied to sustainability-linked bonds and other forms of green financing, digital securities improve the cost efficiency of issuances and encourage a higher number of sustainable projects. In the case of cutting-edge sustainability technologies, such as electric vehicles or solar power, digital securities can also help expand access to funding, not just via bonds but also via private equity or venture capital sources. As early adopters of digital bonds, Singtel and UOB have demonstrated leadership and an innovation mindset, and ADDX is privileged to work with them on this transformative transaction.”

UOB is the lead manager for the issuance of the digital security, tokenised on ADDX.

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