Euroclear, a leading provider of post-trade services, has recently announced a significant milestone in collaboration with the Asian Infrastructure Investment Bank (AIIB). The AIIB has successfully issued its first Digitally Native Note (DNN) on Euroclear’s Digital Financial Market Infrastructure (D-FMI), marking the first digital issuance in USD for Euroclear and the first such issuance by an Asia-based issuer on its platform. This groundbreaking initiative was supported by BMO Capital Markets and Citi, with Citi also serving as the issuing and paying agent on the transaction.
The Digitally Native Note, which received top ratings from Moody’s, Standard and Poor’s, and Fitch Ratings, raised USD 300 million to support AIIB’s sustainable development bond programme. This issuance was made possible through Euroclear’s Digital Securities Issuance (D-SI) service, which facilitates the issuance, distribution, and settlement of fully digital international securities on Distributed Ledger Technology (DLT). The note is listed on the Luxembourg Stock Exchange, with Citi acting as a dealer and issuing and paying agent, BMO Capital Markets as a dealer, and Euroclear Bank as the issuer central securities depository.
Furthermore, clearing of the bonds is also possible on the Hong Kong Monetary Authority’s Central Moneymarkets Unit (CMU) and SIX Swiss Exchange (SIX), providing additional flexibility and accessibility for investors. This DNN issuance showcases the capabilities of Euroclear’s digital securities issuance service in supporting the market adoption of digital assets. By integrating the D-FMI platform with its traditional settlement system and ensuring CSDR compliance, Euroclear aims to provide investors with liquidity tools and access to trading venues seamlessly.
Philippe Laurensy, Managing Director and Head of Product, Strategy, and Innovation at Euroclear, expressed his enthusiasm for this milestone, stating, “As we continue our journey to becoming a digital, data-enabled Financial Market Infrastructure, this issuance signifies another important step forward. Together with our clients and the wider ecosystem, we will continue to embrace innovation and deliver robust technology solutions that can unlock new business opportunities and attract issuers and investors from across the globe.”
AIIB Treasurer, Domenico Nardelli, also shared his pride in partnering with Euroclear, Citi, and BMO on this groundbreaking transaction, emphasizing the significance of this milestone for AIIB as a multilateral development bank financing Infrastructure for Tomorrow. He highlighted the importance of digitization in capital markets and the role of AIIB in connecting Asia with the rest of the world through innovative financial solutions.
Richard Zogheb, Head of Global Debt Capital Markets at Citi, emphasized the growing adoption of digital assets in financial markets and Citi’s commitment to supporting clients through the full lifecycle of key transactions. Similarly, Summer Hinton, Head of Global Markets International at BMO Capital Markets, expressed delight in being part of this milestone transaction and highlighted the importance of digitalization in increasing efficiency and resilience in the financial industry.
Overall, the successful issuance of the Digitally Native Note by AIIB on Euroclear’s D-FMI platform represents a significant step towards the digitization of capital markets and the adoption of digital assets. This collaboration between Euroclear, AIIB, Citi, and BMO showcases the potential for innovation and growth in the financial industry, paving the way for more efficient and scalable solutions in the future.
