Digitalisation comes to the corporate bond market as Swiss energy firm Axpo makes the first ever fully electronic issuance. The magazine treasury management international has written an article about the recently closed bond.
Switzerland-based energy group, Axpo Holding AG has become the first ever issuer of an entirely digital issuance of a corporate bond. Using the independent debt capital market platform, Loanboox, the issuance, it says, marks the first step towards digitalisation and new standards in transparency, pricing and allocation in the primary capital markets.
Axpo’s seven-year green bond was over-subscribed, raising CHF133m (c.€123.4m). Some 35 orders were allocated to a range of institutional investors via the Loanboox platform in the 90-minute book-building window. The bond, which has a coupon of 1.002%, is listed on the SIX Swiss Exchange. Axpo will use the capital to finance projects in the photovoltaic and wind energy sectors.
[…] In the non-digital world, the lead bank calls potential investors for orders, but pricing is akin to a “black box” for them, and they may only get one chance to change their order, Bühler notes.
“Live book-building allows both parties to see the price developing; it’s much more like an open marketplace.”
With Axpo opting for green bond issuance, the transparency afforded by the platform correlates well with the compliance needs of ESG-driven investors, says Bühler. With both sides able to see all details of the issue in advance of the book-building day, oversight of the whole transaction is now possible.