AIIB issues first DNN through Euroclear’s D-FMI platform
23 August 2024 China
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The Asian Infrastructure Investment Bank (AIIB) has issued its first digitally native note (DNN) on Euroclear’s Digital Financial Market Infrastructure (D-FMI).
This marks the first digital issuance in US dollars for Euroclear and the first such issuance by an Asia-based issuer on its platform.
The DNN, listed on the Luxembourg Stock Exchange, raised US$300 million to support AIIB’s sustainable development bond programme.
Clearing of the bonds is also possible on the Hong Kong Monetary Authority’s Central Moneymarkets Unit (CMU) and SIX Swiss Exchange.
Domenico Nardelli, AIIB Treasurer, says: “The success of this transaction proves Euroclear’s D-FMI allows for easy and broad adoption of digital bonds at a 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 digitisation of capital markets and help connect Asia with the world.”
Launched in 2023, Euroclear’s Digital Â鶹´«Ă˝ Issuance (DSI) service enables the issuance, distribution, and settlement of fully digital international securities on distributed ledger technology (DLT).
With the objective to provide investors with liquidity tools and access to trading venues, Euroclear integrated the D-FMI platform with its traditional settlement system, ensuring compliance with the Central Â鶹´«Ă˝ Depositories Regulation (CSDR).
Philippe Laurensy, head of product, strategy and innovation at Euroclear, says: “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 technology solutions that can unlock new business opportunities and attract issuers and investors from across the globe.’’
Euroclear Bank acted as the issuer central securities depository (CSD), while Citi served as a dealer, as well as the issuing and paying agent on the transaction.
Citi has supported AIIB on previous transactions, but this marks the first time the bank has worked with AIIB on the issuance of a DNN.
Richard Zogheb, head of global debt capital markets at Citi, says: “This DNN issuance reflects the growing adoption of digital assets in financial markets, and Citi is proud to be a key participant on this important benchmark.
“From execution and settlement to our work as [an] issuing and paying agent, Citi’s roles leverage the power of the bank’s interconnected businesses to support clients through the lifecycle of transactions.”
Summer Hinton, head of Global Markets International at BMO Capital Markets, which also supported the initiative as dealer, adds: “Digitalisation is high on banks’, issuers’ and investors’ agendas as the financial industry strives to increase efficiency and resilience.
“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.”
This marks the first digital issuance in US dollars for Euroclear and the first such issuance by an Asia-based issuer on its platform.
The DNN, listed on the Luxembourg Stock Exchange, raised US$300 million to support AIIB’s sustainable development bond programme.
Clearing of the bonds is also possible on the Hong Kong Monetary Authority’s Central Moneymarkets Unit (CMU) and SIX Swiss Exchange.
Domenico Nardelli, AIIB Treasurer, says: “The success of this transaction proves Euroclear’s D-FMI allows for easy and broad adoption of digital bonds at a 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 digitisation of capital markets and help connect Asia with the world.”
Launched in 2023, Euroclear’s Digital Â鶹´«Ă˝ Issuance (DSI) service enables the issuance, distribution, and settlement of fully digital international securities on distributed ledger technology (DLT).
With the objective to provide investors with liquidity tools and access to trading venues, Euroclear integrated the D-FMI platform with its traditional settlement system, ensuring compliance with the Central Â鶹´«Ă˝ Depositories Regulation (CSDR).
Philippe Laurensy, head of product, strategy and innovation at Euroclear, says: “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 technology solutions that can unlock new business opportunities and attract issuers and investors from across the globe.’’
Euroclear Bank acted as the issuer central securities depository (CSD), while Citi served as a dealer, as well as the issuing and paying agent on the transaction.
Citi has supported AIIB on previous transactions, but this marks the first time the bank has worked with AIIB on the issuance of a DNN.
Richard Zogheb, head of global debt capital markets at Citi, says: “This DNN issuance reflects the growing adoption of digital assets in financial markets, and Citi is proud to be a key participant on this important benchmark.
“From execution and settlement to our work as [an] issuing and paying agent, Citi’s roles leverage the power of the bank’s interconnected businesses to support clients through the lifecycle of transactions.”
Summer Hinton, head of Global Markets International at BMO Capital Markets, which also supported the initiative as dealer, adds: “Digitalisation is high on banks’, issuers’ and investors’ agendas as the financial industry strives to increase efficiency and resilience.
“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.”
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