UBS Issues Its First Digital and Traditional Bond Markets

UBS AG has issued the first-ever senior unsecured digital bond, a three-year issue for 375 million Swiss francs at a coupon rate of 2.33%. (ISIN: CH1228837865).

The digital bond is the first ever digital bond issued by a financial institution worldwide to be listed, traded, and settled on a regulated digital exchange. It works the same way as a regular UBS AG senior unsecured note and has the same legal status and rating.

UBS provides a means for investors who do not have access to the necessary blockchain technology to purchase a digital bond. So, this gets rid of an obstacle to using new, innovative technology that could speed up, streamline, and make the bond-issuing process easier.

Beatriz Martin, who is the UBS Group Treasurer, said that they were excited to use distributed ledger technology to make the first UBS digital bond. It demonstrates their dedication to fostering the growth of innovative financial market infrastructure. UBS is dedicated to turning technology into a competitive advantage rather than just an enabler.

The digital bond is settled using atomic settlement technology, which is based on the central securities depository (CSD) network of the SIX Digital Exchange (SDX). There is no need for a central clearing counterparty since the settlement is quick and automated through SDX CSD. The UBS digital bond will be able to settle and clear immediately on either SDX CSD directly or on SIX SIS through the operational connection initially disclosed on October 3, 2022.

This digital bond, like all previous senior unsecured notes issued by UBS AG that were listed on the SIX Swiss Exchange, will be listed on both SDX Trading and the SIX Swiss Exchange. This means that it can be added to the Swiss Bond Index (SBI).

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