Singapore’s DBS Bank has announced its first security token offering — a S$15 million (US$11 million) digital bond — on the DBS Digital Exchange.
- The bond is the first listing as part of DBS’s asset digitalization strategy to tap the growing trend toward asset tokenization and expand offerings on the DBS Digital Exchange. The issuance also provides a model for other companies to raise capital through the tokenization of their securities and assets.
- DBS — Southeast Asia’s largest lender by assets — is the sole bookrunner for the DBS Digital Bond, which was issued in a private placement, coming with a six-month tenor and a coupon rate of 0.60% per annum.
- The Asia-Pacific region currently accounts for nearly one-third of the global private equity market, which reached a record US$4.73 trillion in 2020. The issuance of STOs on digital securities exchanges presents a way for companies to raise funds via alternative platforms.
- The bank says the STO will also expand access and liquidity for investors. The digital bond will be traded in lots of S$10,000 (US$7,600), significantly less than traditional wholesale bonds, which in Singapore typically trade in multiples of S$250,000 (US$189,000).
- Launched in December, the DBS Digital Exchange leverages blockchain technology to provide tokenization, trading and custody for digital assets.
See related article: DBS Bank tapping on tokenized bonds as a new way to invest