CCB issues $3 billion ERC20 bonds, we dig up the details

On November 11, 2020, the Wall Street Journal reported that China Construction Bank plans to cooperate with Hong Kong fintech company Fusang to issue a digital bond through the Labuan branch of Construction Bank Malaysia to raise no more than US$3 billion. According to media reports, this is the first time that a domestic bank has issued a US dollar bond using digital tokens.

Specifically, the digital bond issued by China Construction Bank this time will be issued on Ethereum in the form of ERC20 tokens with a face value of US$100 and listed on the Fusang Exchange.

With the help of blockchain technology, all individual and institutional investors except US and Chinese tax residents and Iranian and North Korean individuals and entities can buy and sell the bond with US dollars and Bitcoin . Since the minimum trading unit is an ERC token, investors only need $100 to become the owner of this bond and get a return 50 basis points higher than the London Interbank Offered Rate (Libor) (about 0.75%).

In this article, Golden Finance reporter dug up the detailed information of China Construction Bank’s $3 billion digital bond and Fusang Exchange.

Details of $3 billion digital bond

According to the disclosed CCB bond issuance documents, the basic information of the bonds issued this time is as follows:

Issuer: Longbond Ltd. (Longbond Ltd. was established in September 2020 as a special purpose vehicle for this bond issuance)

Sponsor: China Construction Bank Corporation Labuan Branch

Lead Underwriter: China Construction Bank Corporation, Labuan Branch

Issue size: US$3 billion

Plan duration: Permanent

Issuance arrangement: Will be issued in batches, each batch may contain one or more parts to be issued on different issuance dates.

Redemption: Early redemption is not supported

Guidance yield: LIBOR plus 50 basis points (equivalent to approximately 0.75% at current levels)

Form and denomination: The bond form provides both a physical global certificate and a digital token in digital form . The note denomination is $100 or multiples of $100.

Notes listing: These notes will be listed on the Fusang Exchange in the form of digital tokens and can only be traded on the Fusang Exchange

Minimum subscription per issue: US$10 million

Maximum duration of each issuance: up to 360 days

The first batch of ERC20 tokens

Fusang Exchange’s official website has announced the first batch of digital bonds issued, and the corresponding ERC20 tokens are as follows:

Total tokens issued: 140,000 (market value: $14 million)

Token contract address:

https://etherscan.io/token/0x729cde180a07d6f3109a69a5bf86adc8fac4aafb

Token full name: Longbond SR Notes USD Feb 2021

Token abbreviation: LBFEB21

Release date: November 13, 2020

Expiration date: February 26, 2021

Token value: $100 per token

Suggested price: $99.79

Custody, transfer agent, token issuance platform: Fusang Vault

Minimum trading unit: 1 LBFEB21

Maximum transaction unit: 10000 LBFEB21

Fusang Exchange said that these ERC20 tokens can be bought and sold in US dollars and BTC, and the funds raised will be deposited in the Labuan Branch of China Construction Bank Corporation in a time deposit due in February 2021. In addition, these ERC-20 tokens constitute direct, unconditional, subordinated and secured obligations of the issuer, and all tokens have equal priority and status among each other at all times.

Fusheng CEO Henry Chong said the bonds are effectively like a three-month time deposit product, but the yield is higher than most US dollar bank deposit rates.

Who is Fusang?

What is worth noting this time is the Fusang Exchange, where CCB's bonds are listed.

Who is Fusang Exchange? According to Fusang Exchange's official website, Fusang Exchange obtained a securities exchange license in Labuan, Malaysia in March 2019 in accordance with Section 134 of Part IX of the Labuan Financial Services and Securities Act 2010 (LFSSA). It is the first fully regulated platform in Asia, providing end-to-end infrastructure to support the issuance of security tokens (STOs), allowing both retail and institutional investors to enter the digital asset market safely, compliantly and conveniently.

Fusang Exchange is a subsidiary of Fusang Corp. Fusang Corp was founded in 2014 and is a family office management agency with Henry Chong as its CEO. Fusang Group is affiliated with Portcullis TrustNet Group, an independent trust and family office service provider headquartered in Singapore. Henry Chong is the son of Zhang Guoguang, chairman of Portcullis TrustNet. In February 2019, Fusang Group announced that the family office business would be provided by Portcullis TrustNet, and Fusang would turn to fintech and digital asset business. Fusang Corp has tokenized all its equity in ERC20, the token name is FSC, the contract address is:

https://etherscan.io/token/0x5498c8ab3c04de12aba7fe46da31e6336e40dc98

In addition to traditional IPOs, Fusang Exchange is also committed to supporting the digital tokenization of securities and is the first stock exchange in Asia to allow companies to go public through digital IPOs. Therefore, it provides trading in traditional securities, tokenized securities, cryptocurrencies and fiat currencies. Fusang Exchange also has an affiliated custodian, Fusang Vault, which is an institutional-grade custodian licensed by the Hong Kong Registry.

Labuan is a federal territory in eastern Malaysia, located in the southwestern part of Sabah. Labuan has been directly governed by the federal government since it became a federal territory in 1984, and became a free port and international offshore financial center in 1990.