Citi Achieves T+0 Settlement for Hana Bank’s Digital Bond [fn Market Watch]

[Financial News]  Foreign-currency bond issuance infrastructure at domestic financial institutions is expanding into blockchain-based same-day settlement (T+0). Hana Bank issued a $100 million digital bond through Euroclear’s Digital Financial Market Infrastructure (D-FMI), while Citi handled the entire process, from issuance and settlement to delivery to dealers. The key point is that the transaction went beyond simply issuing a bond in digital form. By connecting existing global bond-market infrastructure with distributed ledger technology (DLT), it effectively compressed the issuance and settlement process into a single day.
According to investment banking (IB) industry sources on the 30th, Citi participated as the issuing and paying agent (IPA) for Hana Bank’s recently issued $100 million digital bond.
The bond was issued and settled on the same day through Euroclear’s D-FMI. It was the first time a foreign-currency-denominated bond issued by a Korean bank had been issued through Euroclear’s D-FMI and settled on a T+0 basis.
Citi managed not only the issuance and settlement but also the delivery of the digital bond to dealers. The bond was subsequently distributed to institutional investors through the existing Euroclear Bank infrastructure.
The combination of digital bonds and existing capital-market infrastructure is what has drawn attention in the IB industry. Rather than creating a separate closed digital ecosystem, the structure applies DLT at the issuance stage while connecting investor allocation and distribution to existing global settlement networks. In effect, it expands the connection with the existing foreign-currency bond market beyond the experimental stage for digital bonds. The listing on Singapore Exchange (SGX) also supports this structure. The bond is the first digital bond listed on SGX. Standard Chartered handled the structuring, issuance and distribution, while Citi served as the issuing and paying agent.
Meanwhile, Citi is currently serving as the issuing and paying agent for most of the issuances conducted to date on Euroclear’s D-FMI. The move is seen as an effort to gain an early foothold in the agent market linking issuers, DLT platforms and existing settlement infrastructure as the global bond market undergoes digital transformation.
Dirk Jones, head of Citi’s issuance services business, said, "As the use of distributed ledger technology expands, the way bonds are issued and settled is also changing." He added, "We will continue to support our clients’ transition as traditional financial market infrastructure and digital financial market infrastructure converge."
[email protected] Kim Kyung-a Reporter