Euroclear announced that the Asian Infrastructure Investment Bank (AIIB) issued its first digitally native note (DNN) executed on Euroclear’s Digital Financial Market Infrastructure (D-FMI). This marks the first digital issuance in USD for Euroclear and the first such issuance by an Asia-based issuer on its platform.
The initiative was supported by BMO Capital Markets as dealer and Citi, serving as dealer as well as the issuing and paying agent on the transaction.
The digitally native note (DNN), which has a triple-A by Moody’s, Standard and Poor’s and Fitch Ratings, successfully raised $300 million to support AIIB’s sustainable development bond program.
The issuance was done via Euroclear’s Digital Securities Issuance (D-SI) service, which enables the issuance, distribution and settlement of fully digital international securities on distributed ledger technology (DLT).
Euroclear fully integrated the D-FMI platform with its traditional settlement system, ensuring compliance with the Central Securities Depositories Regulation (CSDR).
Philippe Laurensy, managing director and head of Product, Strategy and Innovation at Euroclear, said in a statement: “As we continue our journey to becoming a digital, data-enabled Financial Market Infrastructure, this issuance signifies another important step forward. Together with our clients and the wider ecosystem, we will continue to embrace innovation and deliver robust technology solutions that can unlock new business opportunities and attract issuers and investors from across the globe.”
“AIIB is proud to partner with Euroclear, Citi and BMO on this milestone transaction of many firsts. Not only is this the first USD digitally native note in Euroclear’s D-FMI, it is also the first time an issuer based in Asia has issued on the platform and the first time a DNN could be held in CMU or SIX,” said AIIB treasurer, Domenico Nardelli, in a statement. “The success of this transaction proves Euroclear’s D-FMI allows for easy and broad adoption of digital bonds at scale where market participants can buy and sell the bonds within their existing account structures. As a multilateral development bank financing Infrastructure for Tomorrow and with innovation in its DNA, AIIB sees this as an important opportunity to participate in the digitization of capital markets and help connect Asia and the world.”
“This digitally native note issuance reflects the growing adoption of digital assets in financial markets. Citi is proud to be a key participant on this important benchmark. From execution and settlement to our work as issuing and paying agent, Citi’s roles leverage the power of the bank’s interconnected businesses to support clients through the full lifecycle of key transactions,” said Richard Zogheb, head of Global Debt Capital Markets at Citi, in a statement.
“Digitalization is high on banks’, issuers’ and investors’ agendas as the financial industry strives to increase efficiency and resilience,” said Summer Hinton, head of Global Markets International at BMO, in a statement. “Here at BMO, digital is how we operate and we are pleased to see Debt Capital Markets continue to evolve in innovative ways which will be scalable in the future.”