Digital Assets: DBS Launches Digital Bond As An STO On Its Crypto Exchange

June 1, 2021 | Digital Assets, News
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DBS priced an SGD 15 million digital bond, marking DDEx’s first Security Token Offering (STO).

DBS Digital Exchange (DDeX) took another step forward in its development as a venue for issuers and clients to access their funding needs. DBS (SGX: D05), the parent of DDeX, announced Monday that it had priced a privately-placed SGD 15 million digital bond, the DDEX’s first Security Token Offering (STO). The transaction is likely to be the forerunner of more STO issuances and listings on DDeX as businesses raise funds through asset tokenization. (DBS)

The maiden STO on the DDeX

The DBS Digital Bond carries a coupon rate of 0.60% per annum for a six-month tenor with DBS acting as the sole bookrunner. The digital bond complies fully with the current bond legal framework, and therefore investors enjoy the same rights and privileges as legacy bonds.

However, the digital format allows the bond to be traded in board lots of SGD 10,000, compared to SGD 250,000 for traditional wholesale bonds. The smaller denomination will attract retail investors, favorably impacting the liquidity of the bonds.

The transaction highlights the potential of the DDeX as an alternative platform for the potentially vast market for asset digitalization via the issuance of Security Tokens. Corporates in Asia-Pacific can now access the region’s fast-growing private capital markets.

Eng-Kwok Seat Moey, Group Head of Capital Markets at DBS, said in this regard: “This cements our ability to provide integrated solutions across the digital asset value chain, from deal origination to tokenization, listing, trading, and custody, which in turn opens the door for more STOs on DDEx.”

More of DBS clients would embrace STOs as a means to implement their capital raising, Eng-Kwok said, adding that this would further Singapore’s potential as Asia’s digital asset hub.

“The bond token structure was only made possible because of the progressive development of Singapore’s legal and tax infrastructure, which can facilitate more STO issuances to broaden and deepen our capital markets,” Lee added.

Related Story:    Singapore Exchange Firsts – Issues Digital Bond; Launches Crypto Indices

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