Euroclear is pleased to announce that the Asian Infrastructure Investment Bank (AIIB) has successfully issued its first Digitally Native Note, 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, boasting a triple A by Moody’s, Standard and Poor’s and Fitch Ratings, successfully raised USD 300 million to support AIIB’s sustainable development bond programme.
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). The note is listed on the Luxembourg Stock Exchange. Citi acted as a dealer as well as issuing and paying agent, BMO Capital Markets as a dealer, and Euroclear Bank as the issuer central securities depository.
Clearing of the bonds is also possible on the Hong Kong Monetary Authority’s Central Moneymarkets Unit (CMU) and SIX Swiss Exchange (SIX).
This DNN issuance further demonstrates the capabilities of Euroclear’s digital securities issuance service to support market adoption of digital assets. With the objective to provide investors with sufficient liquidity tools and complete access to trading venues, Euroclear fully integrated the D-FMI platform with its traditional settlement system, ensuring CSDR compliance. Euroclear’s D-SI service, launched in 2023, was recently recognised by Global Custodian magazine with the Market Infrastructure Project of the Year award.
Philippe Laurensy, Managing Director and Head of Product, Strategy and Innovation at Euroclear commented: “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. “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 digitisation 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.
“BMO Capital Markets was delighted to be involved in this milestone transaction for AIIB, in partnership with Citi and Euroclear. Digitalisation 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. “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.”