(Updated)

CIMB Group’s first digital securities issuance

CIMB Group’s first digital securities issuance
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KUALA LUMPUR (May 4): Financial services provider CIMB Group Holdings Bhd’s indirect 50%-owned associate CGS-CIMB Securities (Singapore) Pte Ltd has issued its first debt instrument in the form of digital securities as a S$150-million (about RM462.37 million) multi-tranche commercial paper to raise money to fund operating expenses and near-term obligations of CGS-CIMB.

CGS-CIMB and private capital platform iSTOX announced in a joint statement yesterday the issuance of the short-term debt instrument, which matures in three months from its issuance.

"Investors were offered a 1% per annum interest rate over three months. The full S$150 million programme is being carried out using digital securities, with no traditional issuance happening alongside the digital channel.

"The first tranche of S$10 million was oversubscribed by accredited individual and corporate investors on the iSTOX platform,”  CGS-CIMB and iSTOX said.

The commercial paper's issuer CGS-CIMB Securities (Singapore) Pte Ltd is a wholly-owned subsidiary of CGS-CIMB Securities International Pte Ltd, which in turn is a 50:50 joint venture (JV) between China Galaxy International Financial Holdings Ltd and CIMB Group Sdn Bhd, the statement said.

According to the statement, China Galaxy International Financial Holdings Ltd is a wholly-owned subsidiary of China Galaxy Securities Co Ltd, while CIMB Group Sdn Bhd is a wholly-owned subsidiary of CIMB Group Holdings Bhd.

CGS-CIMB Securities International Pte Ltd group chief executive officer (CEO) Carol Fong said in the statement the S$150 million scheme is the first commercial paper programme CGS-CIMB Securities (Singapore) Pte Ltd has done in the form of digital securities to tap an alternative source of funding and a wider spectrum of investors. 

"In working with iSTOX to launch this programme, we were pleasantly surprised that it was completed in half the time a traditional issuance would usually take. 

"Through this collaboration, we are keen to explore first-hand what digital assets and exchanges might hold for us as a broker in the future. Digital issuances are likely to grow and become a strong complement to traditional capital raising channels,” Fong said.

So far on Bursa Malaysia today, CIMB Group Holdings Bhd’s share price had fallen one sen or 0.24% to RM4.12, with a market value of about RM41.24 billion.

The group has 10.01 billion issued shares.

Chong Jin Hun