Qatar National Bank (QNB) has completed its first digitally native bond issuance, with the $500 million bond to be listed on HKEX. The issuance used the HSBC Orion platform, which is operated by the Hong Kong central securities depository, CMU.
That’s the same distributed ledger platform used by the Hong Kong government for its recent third digital bond, the world’s largest DLT-based bond issuance with a size of HK$10 billion ($1.3 billion). HSBC Orion also hosted First Abu Dhabi Bank’s $100 million issuance in July. These bonds likely benefited from Hong Kong grants that cover up to half of the costs for qualifying digital issuances.
HSBC was the sole bookrunner for QNB’s three year floating rate bond priced at SOFR +70 basis points. S&P Global gave the bond an A+ rating, the same as the general QNB rating. While it sees some risks with the digital platform, those were mitigated by CMU’s continuity plan which would require migrating to a conventional platform if serious issues arise. HSBC is acting as paying agent and payments for issuance and redemption will be off-chain via HSBC.
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