Linklaters has advised Cinda International Asset Management Limited (CIAM) as arranger and manager on the successful issuance of the tokenised repackaging notes (“Tokenised Notes” or Short-Term Asset-Backed Liquidity Note Token (“STBL”), which are arranged by it and backed by a portfolio of AAA-rated money market funds (“MMFs”). Hash Blockchain Limited and GF Securities (Hong Kong) Brokerage Limited acted as the initial distributors of the Tokenised Notes and NVTHK Limited provided technical solutions for the blockchain-based issuance.
These Tokenised Notes have several unique and innovative features including,
· First digitally native tokenised repackaging notes issued by a Cayman bankruptcy remote orphan SPV in Hong Kong.
· First tokenised notes with a Hong Kong-based security trustee.
· Innovative incorporation of the features of an open-ended fund including regular issuances, repurchases and the maintenance of the issuance and redemption amount at a fixed level (despite fluctuations in MMFs).
· The tokenised notes are perpetual instruments and are intended to serve as the alternative investment medium (AIM) for an upcoming blockchain community.
· The tokenised notes enable daily subscription and redemption and are transferable 24/7, which provides high liquidity for the investors.
Linklaters, as deal counsel, provided comprehensive legal support throughout the transaction, advising on both the tokenisation aspects and the innovative financing structure. The Linklaters team was led by Asia Head of Structured Finance and Derivatives Chin-Chong Liew, and capital markets partner Ying Zhou from Zhao Sheng Law Firm, Linklaters’ joint operation partner in China, with support from associate Joshua Liu. A separate Linklaters team led by capital markets counsel Beibei Ding advised the security trustee, supported by associate Arnold Tang.
Linklaters’ Asia Head of Structured Finance and Derivatives Chin-Chong Liew commented:
“The Tokenised Notes are highly innovative and complex products bringing together various facets of different products. Addressing these innovations and complexities has required us to collaborate closely with our clients and other stakeholders to design bespoke solutions, draw on the extensive experience of our global network and consolidates our long-standing reputation for providing seamlessly integrated Chinese and international legal advice to clients. We are very excited to be part of this deal alongside Cinda, HashKey, GF and NVT as well as participate in the evolutionary pathway towards a financial market driven by digital and innovative financial products in Hong Kong.”
Linklaters is one of the frontrunners in the digital assets space, in Asia and globally. Drawing on the unique experience and insights from the wider Linklaters network, the team regularly advises on first-to-market tokenisation and structured finance transactions, including advising Zhuhai Huafa Group on its inaugural digitally native bond issuance, advising a major Chinese brokerage firm GF Securities (Hong Kong) on the successful launch of its tokenised securities in Hong Kong SAR, advising on the first digitally native notes listed on HKEX by a HKSAR corporate by HSBC, advising on the Hong Kong SAR Government’s first multi-currency digital green bond offering and the Hong Kong SAR Government’s inaugural tokenised green bond offering. Read more here.
