January 22, 2025<\/p>\n\n\n\n
By Our Correspondent<\/p>\n\n\n\n
Bank of Communications (BoCom) Hong Kong is set to issue a digital bond valued at $300 million, characterized by an unsecured floating rate and a three-year maturity period. As the Hong Kong branch of a state-owned Chinese bank, this issuance may represent the inaugural digitally native bond from a Chinese financial institution. The bond will be issued utilizing the HSBC Orion digital asset platform and will be cleared through the Central Moneymarkets Unit (CMU), which is the central securities depository in Hong Kong that integrates with Orion.<\/p>\n\n\n\n
Moody\u2019s has assigned a preliminary A2 rating to this bond issuance, aligning it with similar conventional issuances and the long-term deposit rating of the Chinese bank. This rating is notable despite the bank’s state ownership, as Moody\u2019s currently maintains a negative outlook on China\u2019s sovereign rating. The bond represents unconditional, unsubordinated, and unsecured obligations of BoCom.<\/p>\n\n\n\n
Moody\u2019s believes that any specific risks associated with blockchain technology have been effectively addressed. This is attributed to the fact that HSBC Orion operates on a privately permissioned blockchain, with cash transactions occurring off-chain for both initial settlements and coupon payments. Consequently, these payments are insulated from potential platform outages. Furthermore, Moody\u2019s highlighted the robust business continuity measures in place for the platform, along with the CMU maintaining an off-chain backup record of beneficial owners, which serves as the definitive legal record.<\/p>\n\n\n\n
Additionally, the platform has been utilized in several prominent bond issuances, including the notable $756 million four-currency sovereign green bond for Hong Kong, issued nearly a year ago. Following a slow start with only two issuances in the first 13 months, activity has surged, culminating in four bonds issued in the last five months. The presence of a digital bond grant scheme in Hong Kong, which may cover up to half of the issuance costs, further facilitates this increase in activity.<\/p>\n","protected":false},"excerpt":{"rendered":"
January 22, 2025 By Our Correspondent Bank of Communications (BoCom) Hong Kong is set to issue a digital bond valued at $300 million, characterized by an unsecured floating rate and a three-year maturity period. As the Hong Kong branch of a state-owned Chinese bank, this issuance may represent the inaugural digitally native bond from a […]<\/p>\n","protected":false},"author":4,"featured_media":6384,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-7040","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-uncategorized"},"yoast_head":"\n