KfW issues first German digital fixed-income bond
08 December 2022 Germany
Image: Siarhei
Promotional bank KfW has become the first issuer to launch a digital fixed-income bond as a central register security. The bond has a €20 million volume, a coupon of 2.381 per cent and a term of two years.
The legal advisor for the transaction was Hengeler Mueller, with Deutsche Bank as lead manager, and was issued by Clearstream using D7, Deutsche Börse’s digital post-trade platform.
The bond is in line with the German Electronic Securities Act, passed in 2021. The Act allows a bond’s global note to be dematerialised, with issuers able to choose whether it is issued conventionally or electronically.
D7 provides a technical infrastructure for the latter process, shortening issuance processes and saving time and effort, Clearstream says. The company has plans to expand the platform to offer decentralised capabilities and be available in a greater number of jurisdictions.
Melanie Kehr, member of the executive board for KfW group, says: “Digitalisation is a central component of our KfW plus strategy adopted in April. Innovation in the area of our refinancing is important to us in order to improve efficiency and reduce operating risks and transaction costs.”
Jens Hachmeister, head of issuer services and new digital markets at Clearstream, comments: “With the digital post-trading platform D7, we are building a new infrastructure for future-ready markets worldwide. Following the successful launch of our structured products offering, we are now enhancing D7 to include the digital issuance of debt securities, such as commercial papers and straight bonds.
“The outstanding market demand shows: the time to digitise financial markets is now.”
The legal advisor for the transaction was Hengeler Mueller, with Deutsche Bank as lead manager, and was issued by Clearstream using D7, Deutsche Börse’s digital post-trade platform.
The bond is in line with the German Electronic Securities Act, passed in 2021. The Act allows a bond’s global note to be dematerialised, with issuers able to choose whether it is issued conventionally or electronically.
D7 provides a technical infrastructure for the latter process, shortening issuance processes and saving time and effort, Clearstream says. The company has plans to expand the platform to offer decentralised capabilities and be available in a greater number of jurisdictions.
Melanie Kehr, member of the executive board for KfW group, says: “Digitalisation is a central component of our KfW plus strategy adopted in April. Innovation in the area of our refinancing is important to us in order to improve efficiency and reduce operating risks and transaction costs.”
Jens Hachmeister, head of issuer services and new digital markets at Clearstream, comments: “With the digital post-trading platform D7, we are building a new infrastructure for future-ready markets worldwide. Following the successful launch of our structured products offering, we are now enhancing D7 to include the digital issuance of debt securities, such as commercial papers and straight bonds.
“The outstanding market demand shows: the time to digitise financial markets is now.”
NO FEE, NO RISK
100% ON RETURNS If you invest in only one asset servicing news source this year, make sure it is your free subscription to Assegt Servicing Times
100% ON RETURNS If you invest in only one asset servicing news source this year, make sure it is your free subscription to Assegt Servicing Times
