PRIVATE market exchange ADDX has launched its blockchain-based ADDX Fixed Income Marketplace (ADDX FI) alongside a multi-issuer debt issuance programme for companies to issue digitised commercial paper and bonds.
ADDX FI will serve as the securities trading platform’s dedicated segment for commercial paper and bonds, with issued digitised bonds under the new programme to be listed and tradable on the marketplace.
On Thursday (May 16), ADDX said the inaugural offering of its new digitised bond programme closed on Apr 2 this year for a S$10 million, 6 per cent per-annum, five-month unsecured commercial paper issued by LHN.
The resultant upsized offering came after LHN’s initial offer at S$5 million was oversubscribed, with orders totalling about S$17.2 million.
It also marked the listed real estate group’s entry into the debt capital markets.
ADDX reckoned the digitised bond programme could save issuers up to 90 per cent in issuance costs by allowing them to come to market “in a matter of days” without incurring the time and costs normally associated with establishing an independent medium-term note or debt issuance programme.
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Investors may generally expect to receive their investments, while issuers may expect to receive their subscription proceeds, on the date of closure of the subscription period.
The programme allows different issuers to utilise umbrella terms for access to alternative debt funding, while allowing issuers to specify commercial terms using “an on-off, easy-fill format”.
Its documentation is formulated for a variety of both global and regional issuers. It includes a toggle for Singapore or English governing laws, which ADDX views to maximise investor outreach opportunity.
ADDX’s permissioned blockchain technology will also benefit issuers and investors by enhancing security and reducing “manual, time-consuming processes” without the need for traditional intermediaries and services, added the company.
As more issuers come onboard ADDX FI, the company expects offerings on the marketplace to meet investors’ “substantial appetite for yield and exposure to fresh and diversified names and sectors”.
It also noted that while commercial paper and bonds are typically only available in denominations of S$200,000 or more, accredited and institutional investors using ADDX FI can access such bonds in subscription amounts as low as S$5,000 or US$5,000.
ADDX founder and group chief executive Danny Toe said: “ADDX’s new digitised bond programme and marketplace address the challenges of traditional funding by offering a lower-cost, lower-friction pathway for businesses to diversify their funding sources.”
“Beyond facilitating transactions, they also serve as catalysts for establishing and building enduring relationships among issuers, investors and partners within the financial ecosystem,” he added.
