OCBC Bank 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.
The note is linked to shares in a US-listed tech giant (the “Underlying Share”) and was launched on the ADDX platform at a minimum size of US$50,000.
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 cashflow while gaining potential exposure on the underlying security(ies).
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.
Headquartered in Singapore, ADDX is on a mission to make investing fairer by democratising private markets. Using blockchain and smart contract technology, ADDX reduces manual interventions in the issuance, custody and distribution of private market products. The resulting efficiency from the use of digital securities allows the platform to fractionalise investments in a scalable and commercially viable manner.
To date, ADDX has listed more than 70 deals on its platform and worked with blue-chip names such as Hamilton Lane, Partners Group, Investcorp, Singtel and CGS-CIMB, as well as Temasek-owned entities Mapletree, Azalea, SeaTown and Fullerton Fund Management. Asset classes available on ADDX include private equity, hedge funds, venture capital, private credit, real estate, debt and structured products.
Mr Kenneth Lai, OCBC Bank’s Head of Global Treasury, said: “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. 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.
“We are excited about the possibilities ahead, especially given the uniqueness and accessibility of this equity-linked structured note.”
ADDX CEO Ms Oi-Yee Choo said: “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.”
She added: “Investors today are looking for a full range of products that enables each segment of their portfolio to be deployed in a manner that maximises returns while diversifying risks. We are honoured to work with OCBC Bank, a reputable issuer with a strong track record, to serve our investors well in a volatile market. This is but the start of a wider partnership that will leverage ADDX’s expertise in alternative investments and OCBC Bank’s wealth management capabilities to provide investors with unique investment opportunities. More structured products are in the pipeline, and we are also exploring the issuance of commercial papers.”
