SGX, HSBC and Temasek complete pilot digital bond for Olam International
03 September 2019 Singapore
Image: knssr/Adobe Stock
The Singapore Exchange (SGX), in partnership with HSBC Singapore and Temasek, has completed the first digital bond issuance on its digital asset issuance, depository and servicing platform for Olam International, a food and agri-business company.
The pilot replicated a SGD $400 million five and a half-year public bond issue and a follow-on SGD $100 million tap of the same issue by Olam International.
SGX’s use of digital asset technology helps streamline processes for issuers, underwriters, investors and ecosystem participants across primary issuance and asset servicing.
The digital bond used HSBC’s on-chain payments solution which allows for seamless settlement in multiple currencies to facilitate the transfer of proceeds between the issuer, arranger and investor custodian.
N Muthukumar, managing director and group chief financial officer of Olam International, said: “Olam is delighted to pilot Asia’s first digital bond in close partnership with SGX, Temasek and HSBC.”
“Going digital will make the entire process more efficient and transparent for all parties – issuers like us receive our funds more speedily, investors get their bonds more quickly while the arrangers, custodian and banks benefit from the reduced probability of error and speed.”
Muthukumar added: “This is in line with Olam’s focused push into digitalisation as part of our refreshed strategy, to grow sustainably and live our purpose of re-imagining global agriculture and food systems.”
Also commenting, Lee Beng Hong, senior managing director, head of fixed income, currencies and commodities, SGX, said: “We are very excited that this collaboration with HSBC and Temasek has led to the successful completion of the first digital syndicated public corporate bond in Asia.”
“Debt capital markets globally are characterised by deeply engrained legacy systems and processes which can be made faster, more accurate and efficient with this new technology. DLT and smart contracts are rapidly evolving technologies, and our vision is to fully digitalise the end-to-end corporate bond issuance and asset servicing process.”
The pilot replicated a SGD $400 million five and a half-year public bond issue and a follow-on SGD $100 million tap of the same issue by Olam International.
SGX’s use of digital asset technology helps streamline processes for issuers, underwriters, investors and ecosystem participants across primary issuance and asset servicing.
The digital bond used HSBC’s on-chain payments solution which allows for seamless settlement in multiple currencies to facilitate the transfer of proceeds between the issuer, arranger and investor custodian.
N Muthukumar, managing director and group chief financial officer of Olam International, said: “Olam is delighted to pilot Asia’s first digital bond in close partnership with SGX, Temasek and HSBC.”
“Going digital will make the entire process more efficient and transparent for all parties – issuers like us receive our funds more speedily, investors get their bonds more quickly while the arrangers, custodian and banks benefit from the reduced probability of error and speed.”
Muthukumar added: “This is in line with Olam’s focused push into digitalisation as part of our refreshed strategy, to grow sustainably and live our purpose of re-imagining global agriculture and food systems.”
Also commenting, Lee Beng Hong, senior managing director, head of fixed income, currencies and commodities, SGX, said: “We are very excited that this collaboration with HSBC and Temasek has led to the successful completion of the first digital syndicated public corporate bond in Asia.”
“Debt capital markets globally are characterised by deeply engrained legacy systems and processes which can be made faster, more accurate and efficient with this new technology. DLT and smart contracts are rapidly evolving technologies, and our vision is to fully digitalise the end-to-end corporate bond issuance and asset servicing process.”
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