UBS AG (SWX: UBSG) recently priced its inaugural senior unsecured digital bond, “a 375 million Swiss franc-denominated three-year bond with 2.33% coupon (ISIN: CH1228837865).”
The digital bond has “the same instrument structure, legal status and rating as a traditional UBS AG senior unsecured note but is the first ever digital bond by a banking institution globally that will be listed, traded and settled on a regulated digital exchange.”
Through this bond, UBS “enables investors, regardless of whether they have the blockchain infrastructure, to invest in a digital bond.” This removes “a hurdle on the way to adopt new disruptive technology that can make issuing bonds faster, more efficient and simpler.”
Beatriz Martin, UBS Group Treasurer, said:
“We are proud to leverage distributed ledger technology to launch the inaugural UBS digital bond. This shows our commitment to support the development of new financial market infrastructure. UBS is committed to using technology not just as an enabler, but to making it a true differentiator for UBS.”
The digital bond settles via SIX Digital Exchange (SDX) distributed ledger-based central securities depository (CSD) network “through atomic settlement technology.”
Settlement via SDX CSD “is instant and automatic and does not require a central clearing counterparty.” Investors will “have the ability to automatically settle and clear the UBS digital bond on either SDX CSD directly or on SIX SIS via the operational link which was formally announced on 3rd October 2022.”
The digital bond will “be dual listed at SDX Trading and SIX Swiss Exchange and will be eligible for the Swiss Bond Index (SBI) alongside all other UBS AG senior unsecured notes which are listed on SIX.”
As covered last month, UBS and Microsoft announced a landmark expansion of their partnership “to accelerate UBS’s public cloud footprint over the next five years.”
Through this transformational initiative, UBS plans “to have more than 50% of its applications, including critical workloads, running on Microsoft Azure, now UBS’s primary cloud platform.”
The partnership furthers UBS’s “cloud first” strategy and “the modernization of its global technology estate.”
Through this partnership, UBS will “have access to the most comprehensive cloud platform, trusted by more than 95% of Fortune 500 companies, with a rich set of productivity and collaboration tools, enabling the firm to increase the speed at which it can deliver and improve upon its digital experiences for clients and employees.”
At the same time, Azure will “help advance UBS’s sustainability initiatives, drive operational efficiencies, and maintain its standards for compliance and security – providing strong foundations on which to scale UBS’s rate of cloud adoption.”