DBS Issues $15M Digital Bond in First Security Token Offering
The DBS Digital Bond, issued via its Digital Exchange (DDEx), has a sixth-month expiry and a coupon rate of 0.6% per annum.
Multinational Singapore-based bank DBS has issued a S$15 million (US$11.3 million) digital bond in its first security token offering (STO).
According to a press release shared with CoinDesk on Monday, the DBS Digital Bond, issued via its Digital Exchange (DDEx), has a sixth-month expiry and a coupon of 0.6% per annum.
The bank was the sole bookrunner for the transaction, which was completed by way of private placement. Differing from traditional wholesale bonds, the digital bond will be traded in lots of S$10,000 (US$7,600).
DBS said the move paves the way for other issuers and clients to use DDEx's infrastructure to "efficiently access capital markets" for their funding needs, and establishes a precedent for further STO issuances and listings.
DBS also said the digital bond complies with the current bond legal framework, providing investors the same legal certainties and protections over their rights as traditional bonds.
"Our maiden STO listing on the DBS Digital Exchange is a significant milestone, as it highlights the strength of our digital asset ecosystem in facilitating new ways of unlocking value for issuers and investors," said Eng-Kwok Seat Moey, group head of Capital Markets at DBS.
The listing demonstrates the bank's ability to provide integrated solutions across the digital-asset value chain, Seat Moey said. The bank expects tokenization to become more mainstream as its clients start to embrace STO issuance as part of their capital fund-raising exercise, she added.
The securities are available for secondary trading among institutional and accredited investors who are members or end clients of the bank’s digital exchange.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.