AIIB issues first DNN through Euroclear鈥檚 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鈥檚 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鈥檚 sustainable development bond programme.
Clearing of the bonds is also possible on the Hong Kong Monetary Authority鈥檚 Central Moneymarkets Unit (CMU) and SIX Swiss Exchange.
Domenico Nardelli, AIIB Treasurer, says: 鈥淭he success of this transaction proves Euroclear鈥檚 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.
鈥淎s 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.鈥�
Launched in 2023, Euroclear鈥檚 Digital Securities 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 Securities Depositories Regulation (CSDR).
Philippe Laurensy, head of product, strategy and innovation at Euroclear, says: 鈥淎s we continue our journey to becoming a digital, data-enabled financial market infrastructure, this issuance signifies another important step forward.
鈥淭ogether 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.鈥欌��
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: 鈥淭his 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.
鈥淔rom execution and settlement to our work as [an] issuing and paying agent, Citi鈥檚 roles leverage the power of the bank鈥檚 interconnected businesses to support clients through the lifecycle of transactions.鈥�
Summer Hinton, head of Global Markets International at BMO Capital Markets, which also supported the initiative as dealer, adds: 鈥淒igitalisation is high on banks鈥�, issuers鈥� and investors鈥� agendas as the financial industry strives to increase efficiency and resilience.
鈥淗ere 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.鈥�
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鈥檚 sustainable development bond programme.
Clearing of the bonds is also possible on the Hong Kong Monetary Authority鈥檚 Central Moneymarkets Unit (CMU) and SIX Swiss Exchange.
Domenico Nardelli, AIIB Treasurer, says: 鈥淭he success of this transaction proves Euroclear鈥檚 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.
鈥淎s 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.鈥�
Launched in 2023, Euroclear鈥檚 Digital Securities 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 Securities Depositories Regulation (CSDR).
Philippe Laurensy, head of product, strategy and innovation at Euroclear, says: 鈥淎s we continue our journey to becoming a digital, data-enabled financial market infrastructure, this issuance signifies another important step forward.
鈥淭ogether 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.鈥欌��
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: 鈥淭his 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.
鈥淔rom execution and settlement to our work as [an] issuing and paying agent, Citi鈥檚 roles leverage the power of the bank鈥檚 interconnected businesses to support clients through the lifecycle of transactions.鈥�
Summer Hinton, head of Global Markets International at BMO Capital Markets, which also supported the initiative as dealer, adds: 鈥淒igitalisation is high on banks鈥�, issuers鈥� and investors鈥� agendas as the financial industry strives to increase efficiency and resilience.
鈥淗ere 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.鈥�
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