The bond is being issued on the Distributed Ledger Technology (DLT) based SIX Digital Exchange (SDX) and can be held in both Central Securities Depositories of SDX and of SIX (SIX SIS). In addition, as a dual listed bond, this instrument will be listed and tradeable at both SIX Digital Exchange and SIX Swiss Exchange. The usage of DLT does not introduce materially higher risks compared to a traditional issuance, according to a statement from Moody’s, who rated the bond Aa3. This further shows the strength of the proposition from SIX Digital Exchange as a fully regulated Exchange and CSD building the financial markets infrastructure of tomorrow. SIX Digital Exchange uses R3’s private, permissioned DLT platform Corda.
Michele Foletti, Mayor of Lugano, stated, “The City of Lugano is a pioneer in the Blockchain space and aims to become an international center of excellence for Blockchain and Crypto adoption. Issuing our latest bond on SDX has been the natural next step and is the perfect opportunity to reach these goals. This digital bond issuance embeds the City of Lugano’s role as a leader for innovation across the public sector and the learning effects will be far reaching. Therefore, we strongly encourage the public sector to embrace this innovation and to support this new issuance method.”
Michael Wölfle, Head Debt Capital Markets, Zürcher Kantonalbank (ZKB), adds, “As sole lead manager and arranger we are very happy with the outcome of this landmark transaction and world first for City of Lugano. The cooperation with the issuer and SDX was seamless and lends itself as blueprint for future dual listed issues. The strong investor interest and placement with close to 20 investors proofs that this format is ever more widely accepted as alternative to conventional bond issues.”
David Newns, Head of SIX Digital Exchange, summarizes, “the City of Lugano’s digital bond issuance on SDX represents the first municipal digital bond ever to be issued on regulated FMI and demonstrates the attractiveness of the value proposition represented by SDX’s dual-listed, natively digital bond instrument offering. SDX efficient and innovative digital bond issuance process maximizes market reach through the connectivity between SDX’s blockchain based platform and SIX’s traditional infrastructure. In 2023 we look forward to an acceleration in the adoption of the SDX’s dual listed, digital bond instrument as the momentum builds around the migration of the market from issuing traditional securities to issuing natively digital securities on fully regulated blockchain based financial markets infrastructure. SDX is really proud to be part of City of Lugano’s “Plan B” and we are looking forward to the implementation of their innovate blockchain projects being brought to production in the near future.”
Official press releases of the City of Lugano found here
Download the City of Lugano press release here (in Italian)
SDX is licensed by Switzerland’s financial market regulator, FINMA, to operate an Exchange and a Central Securities Depository (CSD). SDX offers issuance, listing, trading, settlement, servicing, and custody of digital securities. SDX is committed to working with partners, members, and clients to promote and build out a new market structure for digital assets globally.
SIX operates and develops infrastructure services for the Swiss and Spanish Stock Exchanges, for Post-Trade Services, Banking Services and Financial Information with the aim of raising efficiency, quality and innovative capacity across the entire value chain of the Swiss and Spanish financial centers. The company is owned by its users (120 banks). With a workforce of 3,685 employees and a presence in 20 countries, it generated operating income of CHF 1.5 billion and Group net profit of CHF 73.5 million in 2021. www.six-group.com