Recently, DBS announced that it has priced an SGD 15 million digital bond, marking DDEx’s first Security Token Offering (STO). The DBS Digital Bond comes with a six-month tenor and coupon rate of 0.60% per annum and was completed by way of the private placement. DBS is the sole bookrunner for the transaction.
DDEx was launched in December 2020 as a part of an integrated digital asset ecosystem that leverages blockchain technology to offer clients a secure and transparent platform to raise funds from the private market.
According to DBS this inaugural issue paves the way for more Security Token Offerings and provides a new avenue for issuers, investors, and dealer banks to interact digitally on a seamless platform.
Group Head of Capital Markets at DBS, Eng-Kwok Seat Moey, said that asset digitalization through the issuance of Security Tokens offers a tremendous opportunity for businesses seeking alternative platforms such as DDEx to raise funds from Asia-Pacific’s burgeoning private capital markets.
Source: DBS
Well, the Asia-Pacific region currently amounts for nearly one-third of the global private equity market, which climbed up to a record USD 4.73 trillion in 2020.
Seat Moey said, "We expect asset tokenization to increasingly become more mainstream as more of our clients start to embrace security token issuance as part of their capital fundraising exercise which we believe will boost Singapore’s ambitions to be a digital asset hub in Asia,”.
The digital bond will be traded in board lots of SGD 10,000, which is a significantly smaller denomination compared to traditional wholesale bonds, which generally require investment and trading amounts in folds of SGD 250,000.
This also highlights DDEx’s ability in driving liquidity and lowering barriers to access for investors. With this announcement, the securities are now available for secondary trading among accredited investors who are either members or applicable end clients of members of DDEx.
Well, DDEx has received strong market traction since its launch. Volumes of daily trading have increased 10-times from the initial week of launch, and the exchange currently serves over 120 participants. DBS also holds over SGD 80 million in digital assets in its custodial services.
