Singapore-based multinational banking corporation, DBS Bank, has launched its first-ever security token offering, or STO, by issuing a digital bond.
The DBS digital bond has been priced at $11.35 million and comes with a six-month tenor and coupon rate of 0.60% annually. The offering was carried out through a private placement hosted by DBS Digital Exchange, or DDEx, marking DDEx’s first STO.
To encourage investor engagement, the bond is set to be traded in board lots of 10,000 Singapore dollars (roughly $7,560) — a dramatic reduction compared to the 250,000 Singapore dollar board lots that traditional wholesale bonds are traded in.
The digital bonds will be available for secondary trading to clients of DDEx who are accredited or institutional investors.
DBS hopes its offering will pave the way for other issuers to launch security token offerings via the DDEx platform.
Eng-Kwok Seat Moey, the Group Head of capital markets at DBS, emphasized that security tokens offer an efficient and innovative method for raising capital