CCB to raise USD 3 billion through blockchain bond tradeable on FUSANG
By Edil Corneille
China Construction Bank Corporation Labuan Branch (CCB Labuan), a tier-1 branch of Beijing-based China Construction Bank Corporation (CCB), will be the lead arranger for what is said to be the first publicly listed debt security on a blockchain, to be tradeable on FUSANG Exchange. The bond, Longbond SR Notes (LBFEB21), will be issued by Longbond Ltd., a securitisation Special Purpose Vehicle (SPV) set up with the sole purpose of issuing digital bonds and depositing the proceeds with CCB Labuan. CCB Labuan will act as the lead arranger and listing sponsor for the deal.
Felix Feng Qi, Principal Officer of CCB Labuan said, “CCB Labuan is happy to play its role as lead arranger for the first publicly listed debt security on a blockchain. The issuance serves to narrow the divide between FinTech and the wider financial markets. CCB Labuan will continue to work on expanding the technological boundaries to provide value added products and services to our customers, clients, and associates.”
The bond will give investors access to bank-secured deposits at an annualised rate of LIBOR +50bps (~0.70%). It will be issued at a discount and can be traded on FUSANG Exchange prior to maturity, in USD and Bitcoin (BTC), with a total program target size of USD 3 billion.
The Labuan Financial Services Authority (Labuan FSA) has been keen to drive digital transformation in the financial services industry. Datuk Danial Mah Abdullah, Labuan FSA’s Director-General stated, “Labuan FSA encourages these kinds of collaborative efforts among Labuan financial institutions to facilitate cross pollination business and generate a more vibrant market.”
With this digital bond, both retail and sophisticated investors globally will have direct access through the FUSANG Exchange with investment amounts of as little as USD 100.
Henry Chong, CEO of FUSANG Exchange said, “Issuers no longer need to operate in a fragmented environment with multiple process flows as FUSANG’s end-to-end platform streamlines their needs, from issuance to listing, in one place. Moreover, global investors can now benefit from access to an investment previously reserved for only the largest institutions, together with low and transparent fees.”
Chong continued, “FUSANG is excited to partner with CCB on this landmark issuance. We think this is the perfect showcase for how digital securities can power financial inclusion, by combining the exciting advancements in blockchain technology with the tokenisation of traditional securities. We believe that this will be the start of Crypto 2.0. – the true institutionalisation of digital asset products.”
IBSi Daily News Analysis
May 17, 2022
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