Shanghai-headquartered Bank of Communications (BoCom) has issued a digital bond through its Hong Kong branch.
The bond is for $300 million on a secured overnight financing rate (SOFR) floating rate, and is due 2028, according to a media release. As of January 21, the coupon rate was 4.8276% as disclosed on the Hong Kong Stock Exchange, where the notes are listed.
The issuance marks the first Chinese bank issuer in the field, after the first Chinese corporate issuer, Zhuhai Huafa, which issued a three-year Rmb1.4 billion ($191 million) digitally native bonds late last year.
The notes are cleared through the Central Moneymarkets Unit (CMU) run by the Hong Kong Monetary Authority, and issued on HSBC’s digital asset platform, Orion. Bank of Communications’ offering is also the first floating rate digital bond on the platform.
Settlement of notes and payment of principal and interest are conducted in fiat currency outside the blockchain.
The Bank of Communications and HSBC acted as joint global coordinators, joint bookrunners and joint lead managers for the transaction.
John O’Neill, group head of digital assets and currencies at HSBC, commented: “We are very pleased that the first digital bond issued on HSBC Orion in 2025 is from another bank, underlining the broadening demand for digital assets.”
Other participating institutions include Agricultural Bank of China Hong Kong; Bank of China; Bocom International; China Galaxy International Securities; CICC; China Securities International; CITIC Securities; Crédit Agricole; Guotai Junan International; Huaxia Bank Hong Kong; Industrial and Commercial Bank of China; Industrial Bank Hong Kong; and Standard Chartered.
Moody’s Ratings assigned A2 rating to the issuance, the same level of BoCom’s long-term deposit ratings.
The rationale cited direct, unconditional, unsubordinated and unsecured obligations that constitute the notes, which will rank pari passu (on equal footing) at all times with other obligations of BoCom. It also added that a different technology “does not add materially higher risks” compared to traditional issuances.
Linklaters, Allen Overy, King & Wood Mallesons and JunHe LLP, acted as legal advisors on the transaction. Hanwen Yu, Linklaters’ capital markets partner, commented that the transaction is an “iterative development in the digitalisation of capital market products in Hong Kong”.
