UnionBank’s 11 billion peso digital bond issue is listed on the secondary market
UNIONBANK of the Philippines, Inc. listed its 11 billion peso digital bonds on the Philippine Dealing and Exchange Corp on Thursday. (PDEx) for trading in the Iffixed income market.
“This pioneering issuance serves as a cornerstone in UnionBank’s journey to embrace digitalization and positively disrupt the industry. I am confident that this will be recognized globally as a game-changing digital initiative in finance,” UnionBank Treasurer and Head of Global Markets Jose Emmanuel U. Hilado said Thursday at the ceremony. registration.
The 11 billion peso digital bonds were issued from UnionBank’s existing 39 billion peso bond program.
The bank’s digital bonds have a duration of 1.5 years and consist of Series E securities maturing in 2023 with a fixed interest rate of 3% per annum.
The joint lead managers and bookrunners for the transaction were The Hongkong and Shanghai Banking Corp. ltd. and Standard Chartered Bank. They were also sales agents with UnionBank.
The digital bonds were issued through the Proof of Concept (POC) digital ledger and digital depository of Philippine Depository & Trust Corp.
“For this POC live test, originally targeting 1 billion pesos among 200 bondholders, the Philippines UnionBank team and its underwriters made every effort to issue at least 11 billion pesos of bonds to 893 bondholders. of bonds. Now, we are confident that such a commitment removes any doubt that UnionBank is indeed the proverbial tip of the digital spear,” said PDEx President and CEO.ffisays Antonino A. Nakpil.
The POC uses distributed blockchain technology for ledger and custodial operations.
“We hope to learn from this experience and determine the efficiencies to enable a harmonious technological framework for these links. I am optimistic that with this latest development in our capital markets, through these joint efforts, we can catapult the country to become one of the leading and most innovative technology markets in the region,” said the Commissioner of the Securities and Exchange Commission, Kelvin Lester K. Lee. .
Blockchain uses fully digital and decentralized ledgers to record transactions. This distributed ledger also serves as the platform where virtual currencies are transacted.
The storage units used in the blockchain are continuously updated and secured using cryptography, which makes data management and other data-based processes decentralized, tamper-proof, and more transparent.
Use cases in the IfThe financial industry that involves blockchain technology includes fraud reduction, Know-Your-Customer processes, trading platforms, and even payments.
UnionBank launched its Iffirst successful enterprise blockchain application in 2018 with the launch of their blockchain platform for general flyers, Hilado noted Thursday.
“And then we created Project i2i, a financial inclusion project, using distributed ledger technology. We launched a Bitcoin ATM (ATM) in our branch called The ARK and issued our own stablecoin called PhX in 2019. In 2020, we successfully completed a proof of concept with Standard Chartered Bank for issuing our retail bond on a digital platform,” he said.
UnionBank reported lower net profit in the first three months of the year as trading gains normalized. Its net income fell 45% to 2.6 billion pesos in the first quarter, from 4.72 billion pesos in the same period of 2021.
Shares of the Aboitiz-led bank rose 3.7% or P3 to P84 on Thursday from the close of P81 on Wednesday. — Keisha B. Ta-asan