FAB issues Mena’s first blockchain-based bond: First Abu Dhabi Bank is issuing a three-year, USD 100 mn floating rate digital bond, the first of its kind in the Middle East, a spokesperson from HSBC, the coordinator and lead manager and bookrunner on the issuance, told EnterpriseAM UAE. The distributed ledger technology-based bond is currently being priced, according to a statement (pdf).

The bond will be accessible through HSBC’s Orion platform, the bank’s digital assets platform, which is operated by Hong Kong’s Central Moneymarkets Unit (CMU). It can be accessed through Orion directly, or through a custodian or accounts held with CMU, Euroclear, and Clearstream.

The ADX is integrating the bond with existing post-trade infrastructure, the statement said, without disclosing further details on the exact listing date.

SOUND SMART- Digital bonds are set to revolutionize the bond market with lower operating costs and near-instant settlement times — a big shift from what has historically been a burdensome and time-consuming process. The market is still nascent, with regulatory frameworks still in the process of being put into place — but more issuers are turning to blockchain for the transparency and efficiency it offers.

What’s next? The bond lays “the foundation for a broader class of tokenized assets — including green bonds, sukuk, and real estate-linked products,” ADX Group CEO Abdulla Salem Alnuaimi said.

REMEMBER- The Securities and Commodities Authority (SCA) issued draft rules for tokenized assets in January. The regulation covers contracts on a DLT, token transfers and cancellations, and gives the SCA enforcement power over violations.

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