HSBC has issued a HK$1 billion (US$ 128m) one year digital note using DLT. It used a similar setup to the sovereign Hong Kong US$756 million digital bond issuance earlier this year. Hence, the latest digital note was issued on the HSBC Orion DLT, with the local central securities depository (CSD), the CMU, as the platform operator.
It is the first digital note listed on the Hong Kong Stock Exchange (HKEX) by a Hong Kong company. It is also the first English law digital bond issued in Hong Kong. The 3.6% notes used a two day settlement window.
The integration with other CMU systems means that investors who don’t directly participate in the DLT platform can still buy the notes in the conventional manner. For this issuance the bonds are accessible directly via the DLT, via custodians and via CMU accounts. The February sovereign bonds were issued under Hong Kong law and were also accessible via Euroclear and Clearstream. However, the Euroclear and Clearstream linkage to CMU is not yet available for the English law digital bond.
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