What's New In Investments, Funds? UBS Launches Inaugural Digital Bond

Editorial Staff

4 November 2022

UBS
has priced its inaugural senior unsecured digital bond, a SFr375 million ($370 million) three-year bond with a 2.33 per cent coupon.

The digital bond has the same instrument structure, legal status and rating as a traditional UBS senior unsecured note. However, it is the first ever digital bond issued by a banking institution globally that will be listed, traded and settled on a regulated digital exchange, the Zurich-based group said.

Through this bond, UBS enables investors, regardless of whether they have the blockchain infrastructure, to invest in a digital bond, it said.

The digital bond settles via SIX Digital Exchange (SDX) distributed ledger-based central securities depository (CSD) network through atomic settlement technology. Settlement via SDX CSD is instant and automatic and does not require a central clearing counterparty. Investors can automatically settle and clear the UBS digital bond on either SDX CSD directly or on SIX SIS via the operational link which was formally announced on 3 October 2022.

The digital bond will be dual listed at SDX Trading and SIX Swiss Exchange and will be eligible for the Swiss Bond Index (SBI) alongside all other UBS AG senior unsecured notes which are listed on SIX.