DBS Bank Ltd is looking to expand its suite of services offered to clientele. These efforts have now seen the Singaporean outfit announce an $11.35M USD ‘digital bond’ in what is the company’s first digital securities offering (DSO).
Access to the bond is available through DDEx – a digital exchange operated by DBS Bank itself. It is noted that this is simply a first step. DBS Bank anticipates that should this DSO be a success, others will look to emulate it.
“This paves the way for other issuers and clients to tap on DDEx’s capabilities to efficiently access capital markets for their funding needs and sets the stage for more STO issuances and listings on DDE as asset tokenization turns mainstream.”
As the main underwriter for these digital bonds, DBS Bank has structured the bond with a six-month expiration or ‘tenor’, and 0.6% coupon-rate per annum.
In an effort to attract as a broad an investor market as possible DBS Bank notes that the bond will be sold in lots 1/25th the size normally seen. The ability to do so is a key attribute made possible through the use of blockchain technology like digital securities.
As the digital bond on offer is indeed a security, the offering must adhere to existing regulatory framework – meaning that access is currently restricted to accredited investors.
Upon announcing news of its digital bond, Eng-Kwok Seat Moey, Group Head of Capital Markets at DBS, stated,
“Our maiden STO listing on the DBS Digital Exchange is a significant milestone, as it highlights the strength of our digital asset ecosystem in facilitating new ways of unlocking value for issuers and investors. We expect asset tokenisation to increasingly become more mainstream as more of our clients start to embrace security token issuance as part of their capital fund raising exercise which we believe will boost Singapore’s ambitions to be a digital asset hub in Asia.”
News of DBS Bank hosting a digital securities offering should not come as a major surprise. Months ago documentation from the outfit was leaked online, indicating forthcoming plans to begin servicing the digital assets sector in a big way. While the DBS Bank documentation has long been removed, we have seen the launch of DDEx, DBS Digital Custody, and now its inaugural DSO in the time since.
With regards to DBS Digital Custody, DBS Bank indicated that since launch it has seen clients deposit over $60M USD.