UnionBank rates the Philippines’ first digital bond

Union Bank of the Philippines has issued the country’s first digital bond for 11 billion pesos ($210 million), in collaboration with the Philippine Depository & Trust Corp (PDTC) and fintech company Hashstacs (STACS) based in Singapore.

The peso-denominated offering was priced at 3.25% per annum for a 1.5-year term, following oversubscription from a minimum issue size of one billion pesos. It was issued from UnionBank’s $39 billion bond program.

With STACS as its technology partner, PDTC, the Philippines Central Securities Depository for Debt and Equity, embarked on the project, a proof of concept to explore, use and determine the effectiveness of distributed ledger technology (DLT) for its Fixed Income Registry. and deposit transactions. The objective was to support the issuance and management of a Philippine digital bond.

Through this partnership, PDTC and STACS were able to effectively model and optimize the workflows involved, unlocking new efficiencies and strategic opportunities. New digital processes have proven to be completely seamless for underwriters, issuers and bondholders with paperless submission of issuance documents for listing and registration through the company’s electronic securities issuance portal parent of PDTC, Philippine Dealing System Holdings Corp (PDS Group).

The system is fully compliant with applicable securities laws and regulations, as well as the rules of Philippine Dealing & Exchange Corp. (PDEx), a fixed income market operator of the PDS Group.

UnionBank’s digital bond is listed on the PDEx fixed income market and secondary market transactions will take place on the existing market infrastructure for trading and clearing and a newly built nexus between the clearing system and PDTC digital deposit to effect delivery against payment settlement. According to PDS Group, the interoperability feature of the project enables PDEx trading participants and PDTC depositary participants to seamlessly reap the benefits of the new digital market infrastructure while being supported by traditional market infrastructure and in compliance. with the regulatory framework.

Commenting on the launch of the digital bond, PDS Holdings Chief Executive Officer Ramon Monzon said, “The digital economy is growing rapidly across the world and it promises to be an important driver for innovation, competitiveness and economic growth. To be part of the digital economy, financial market infrastructures must digitize, and this is what has driven the PDS Group’s digitization initiatives.

PDS Group plans to expand the platform with more functionality, including ESG management through holistic ESG data as well as smart contracts to automate the lifecycle management of sustainable financial products.

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