Private market exchange ADDX has launched a blockchain-based multi-issuer debt issuance solution for firms to issue digitised commercial paper and bonds.
The digitised bonds from the Multi-Issuer Debt Issuance Programme will be listed and tradeable on ADDX Fixed Income Marketplace (ADDX FI). ADDX said issuers can expect savings of up to 90% or more in issuance costs. To date, more than S$1 billion (US$730 million) in new money has been raised in digitised commercial paper through ADDX’s platform.
ADDX Group CEO, Danny Toe, said, “In today’s dynamic business landscape, the need for accessible and cost-effective funding avenues has never been more pressing. 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.”
Issuers are able to specify currencies, denominations, fixed or floating coupon rates, tenors and other commercial terms using an on-off, easy-fill format. ADDX said its permissioned blockchain technology means manual, time-consuming processes are reduced while enhancing security, eliminating the need for traditional intermediaries and services and giving rise to “considerable” cost savings for issuers and investors.
Small-cap and mid-cap companies will benefit from being able to expand their pool of financing sources beyond shareholders and traditional bank lenders by obtaining alternative debt funding cost-effectively, ADDX said. Accredited and institutional investors can access commercial paper and bonds, typically only available in wholesale denominations of S$200,000 or more, in subscription amounts as low as S$5,000 or US$5,000.
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