Using distributed ledger technologies for bond issues – a primer

Abstract

Distributed ledger technologies (DLTs) are expected to disrupt the corporate finance field by offering a cheaper, quicker and simpler funding alternative for companies, thus playing a relevant role in improving access to the financial markets. This paper seeks to test this premise. Based on information collected from advisors in two transactions completed in the market, the paper compares the process of a traditional international bond issue with one on a DLT platform. The paper clarifies how a DLT-based bond issue is conducted in practice and concludes that such issues are not more affordable or time efficient and are equally complex when compared to a conventional issue. These conclusions are, however, limited in scope due to the case study methodolody adopted. The conclusions may also be impacted by the analysis of legal matters beyond the process of issuance and by the consideration of quantitative data concerning the costs incurred with the issue.