Oversea-Chinese Banking Corporation (OCBC) O39 has partnered with global private market exchange ADDX to distribute its first tokenised equity-linked structured note to accredited investors.
The fixed coupon note, launched in early May, is the first product issued by a Singapore bank to land on ADDX’s shelf. “It marks the start of a long-term partnership between ADDX and OCBC Bank that will see both parties work together to put out a wider variety of investment products,” says the bank on May 24.
The note is linked to shares in a “US-listed tech giant” and was launched on the ADDX platform at a minimum size of US$50,000 ($67,357.25). An ADDX spokesperson says the name of the company is undisclosed due to market sensitivities.
Fixed coupon notes are equity-linked structured notes that pay regular distributions at pre-defined intervals, provided that no extraordinary event or trigger event has occurred according to the terms of the notes.
Fixed coupon notes present a way for investors with a specific view on the price movement of an underlying security or a basket of securities to generate additional cash flow while gaining potential exposure on the underlying security or securities, says OCBC.
Partnering new digital players like ADDX and deepening banking relationships with high-growth and emerging sectors allows OCBC to increase its customer proposition and tap on a larger investor base. Tokenising the fixed coupon note will in turn allow more accredited investors to access the product, adds the bank.
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Kenneth Lai, OCBC Bank’s head of global treasury, says: “While we already have a comprehensive stable of treasury products, which includes sustainability-linked interest rate swaps, cross currency swaps, structured deposits and green bonds, it is important that we continue to innovate and find new channels for our products.”
Lai adds: “We are therefore pleased to be the first Singapore bank to offer an equity-linked structured note in tokenised form on ADDX. It is the first innovation resulting from a longer-term partnership with ADDX, and we are hopeful that it will lead to more diverse product offerings that are relevant and appealing to the global accredited investor base of ADDX.”
Headquartered in Singapore, ADDX has listed more than 70 deals on its platform and worked with blue-chip names like Hamilton Lane, Partners Group, Investcorp, SingtelZ74 and CGS-CIMB; as well as Temasek-owned entities Mapletree, Azalea, SeaTown and Fullerton Fund Management.
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Asset classes available on ADDX include private equity, hedge funds, venture capital, private credit, real estate, debt and structured products.
ADDX CEO Choo Oi-Yee says: “Structured products are designed to provide investors with unique risk and return characteristics that may not be available through traditional investments, and are an attractive option for investors weighing yield-generating options in the current economic climate. These products can potentially offer higher returns than bonds or fixed deposits — they typically include a combination of a fixed-income component and a derivative component providing exposure to the performance of underlying assets such as stocks or commodities. Moving forward, structured products will be a key plank in ADDX’s issuance strategy.”
ADDX is a full-service capital market platform. It has raised a total of US$140 million in funding since its inception in 2017, including US$50 million in its Series A round in January 2021 and US$78 million in its Pre-Series B round, which began in May 2022 and was extended in November that year.
Its shareholders include Singapore Exchange (SGX), the Stock Exchange of Thailand, Temasek subsidiary Heliconia Capital, the Development Bank of Japan, UOB, Hamilton Lane, Tokai Tokyo Financial Holdings and KB Securities, a subsidiary of Korea’s largest banking group KB Financial Group.
ADDX has been approved by the Monetary Authority of Singapore (MAS) as a recognised market operator (RMO). It also has a capital markets services (CMS) licence to deal in securities and collective investment schemes as well as to provide custodial services.
ADDX currently serves individual accredited investors from 39 countries spanning Asia Pacific, Europe and the Americas (except the US). ADDX also serves wealth managers and corporate investors through its institutional service, ADDX Advantage.
Shares in OCBC closed 6 cents lower, or 0.49% down, at $12.20 on May 24.
