Linklaters advises the sole global coordinator and the joint lead managers on the successful offering of HK$1bn 3.6% digitally native notes (DNNs) due 2025 by The Hongkong and Shanghai Banking Corporation Limited under the issuer’s US$20bn Medium Term Note Programme. The transaction represents the first digitally native notes listed on The Stock Exchange of Hong Kong Limited (HKEX) by a Hong Kong SAR corporate.
The one-year Hong Kong dollar denominated DNNs were issued in dematerialised registered form and cleared through the Central Moneymarkets Unit (CMU) of the Hong Kong Monetary Authority. The creation process of the DNNs utilises, and the beneficial interests in the DNNs are recorded using, HSBC Orion*.
Building on the development in digitalisation, the DNNs were issued in digitally native format, with a T+2 settlement window. This innovative approach streamlines the issuance process and reflects the growing trend of digital securities. Issuing the DNNs in digitally native dematerialised registered form also benefits from compliance with corporate formality requirements in Hong Kong.
The Linklaters’ team was led by capital markets partner Gloria Cheung, with support from counsel Grace Wee and managing associate Lily Wang. A separate team led by counsel Beibei Ding acted as legal adviser to the fiscal agent.
Linklaters’ capital markets partner Gloria Cheung commented:
“Our cross-practice team is honoured to have supported with this unique transaction, drawing on our knowledge and expertise from advising on the pioneering digital bond offerings by the Hong Kong SAR Government. We are excited to be collaborating closely with our clients in the progression of Hong Kong as an international digital bonds hub in the region.”
Linklaters is at the forefront of the evolving digital innovation space. The team regularly advises on path-breaking digital assets transactions, including advising on the Hong Kong SAR Government’s first multi-currency digital green bond offering – the first digitally native bond issuance in Hong Kong, as well as its inaugural tokenised green bond offering – the first tokenised green bond by a government issuer globally.
*HSBC Orion refers to the distributed ledger technology (DLT) platform deployed by HSBC to CMU as the DLT platform operator for the purposes of, among other things, creating and settling the DNNs.
