Friday, 24 August 2018 11:03

CBA, World Bank complete $110 million blockchain bond capital raise Featured

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Australia’s Commonwealth Bank and the World Bank have jointly completed the raising of $110 million with the launch of the world’s first blockchain bond.

The blockchain bond raising exceeded market expectations, with investors in the bond including CBA, First State Super, NSW Treasury Corporation, Northern Trust, QBE, SAFA, and Treasury Corporation of Victoria.

The bond-i blockchain platform was built and developed by the CBA Blockchain Centre of Excellence, housed in the Sydney Innovation Lab.

The successful bond transaction followed the World Bank's mandating of the CBA earlier this month to be the sole arranger for the $A Kangaroo bond — referred to as the "bond-i" blockchain offered new debt instrument — and two weeks of market consultation by the CBA.

James Wall, executive general manager of IB&M International, CBA, said, “Since announcing the mandate, the interest we’ve received for bond-i has been overwhelming.

“It is clear the market is ready and open to the uptake of emerging technologies and sees the potential evolution of the capital markets. It has been a pleasure to work on such a ground-breaking transaction with a forward-thinking organisation like the World Bank.”

The bond launch also marks the first time that investors have supported the World Bank’s development activities in a transaction that is fully managed using the blockchain technology.

The CBA says the "bond-i" bond forms part of a broader strategic focus by the World Bank to harness the potential of disruptive technologies for development. In June 2017, the World Bank launched a Blockchain Innovation Lab to understand the impact of blockchain and other disruptive technologies in areas such as land administration, supply chain management, health, education, cross-border payments, and carbon market trading.

Arunma Oteh, World Bank treasurer, said: “I am delighted that this pioneer bond transaction using the distributed ledger technology, bond-i, was extremely well received by investors.

“We are particularly impressed with the breath of interest from official institutions, fund managers, government institutions, and banks. We were no doubt successful in moving from concept to reality because these high-quality investors understood the value of leveraging technology for innovation in capital markets.

“Our painstaking work, over the last year, and in partnership with Commonwealth Bank of Australia, was equally instrumental to the success of the transaction. Commendation also to our other service providers, King & Wood Mallesons, Mark-it, Microsoft and Toronto Dominion Securities.”

Oteh said the World Bank welcomed the “huge interest” the bond  transaction has generated from various stakeholders and “will continue to seek ways to leverage emerging technologies to make capital markets more secure and efficient”.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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