AIIB issues its first digitally native note on Euroclear's D-FMI platform

The Asian Infrastructure Investment Bank (AIIB) has successfully issued its first digitally native note (DNN) on Euroclear's Digital Financial Market Infrastructure (D-FMI). This marks the first digital issuance in USD for Euroclear. The initiative was supported by BMO Capital Markets as dealer and Citi, serving as dealer as well as the issuing and paying agent on the transaction.

The issuance, the first by an Asia-based issuer, was executed via Euroclear's Digital Securities Issuance (D-SI) service, which enables the issuance, distribution and settlement of fully digital international securities on Distributed Ledger Technology (DLT). The DNN, boasting a triple-A rating by Moody's, Standard & Poor's and Fitch Ratings, successfully raised USD300 million to support AIIB's sustainable development bond programme. The note is listed on the Luxembourg Stock Exchange. Citi acted as a dealer, as well as the issuing and paying agent, BMO Capital Markets as a dealer, and Euroclear Bank as the issuer central securities depository. Clearing of the bonds is also possible in the Hong Kong Monetary Authority's Central Moneymarkets Unit (CMU) and the SIX Swiss Exchange (SIX). AIIB was advised on the transaction by Clifford Chance, and the dealers were advised by A&O Shearman.

This issuance demonstrates how the existing financial markets infrastructure can be used to broaden the adoption of digital securities.

In AIIB's fifth year of being a bond issuer, this DNN issuance demonstrates that AIIB is committed to innovation in capital markets and to making settlements more efficient and faster. The Euroclear D-FMI platform is fully integrated into Euroclear's traditional settlement system, ensuring investor and market maker access.

Philippe Laurensy, Managing Director and Head of Product, Strategy and Innovation commented: "As we continue our journey to becoming a digital, data-enabled Financial Market Infrastructure, this issuance signifies another important step forward. Together with our clients and the wider ecosystem, we will continue to embrace innovation and deliver robust technology solutions that can unlock new business opportunities and attract issuers and investors from across the globe.''

AIIB Treasurer Domenico Nardelli said: "AIIB is proud to partner with Euroclear, Citi and BMO on this milestone transaction of many firsts. Not only is this the first USD digitally native note in Euroclear's D-FMI, it is also the first time an issuer based in Asia has issued on the platform and the first DNN to be held in HKMA's CMU. The success of this transaction proves Euroclear's D-FMI allows for easy and broad adoption of digital bonds at scale, where market participants can buy and sell the bonds within their existing account structures. As a multilateral development bank financing Infrastructure for Tomorrow and with innovation in its DNA, AIIB sees this as an important opportunity to participate in the digitization of capital markets and help connect Asia and the world."

Citi has supported AIIB on previous transactions and this marks the first time that Citi has worked with AIIB on the issuance of a digitally native note. Citi will continue to facilitate the issuance of digital bonds, unlocking the potential of digital assets for clients including efficient access to capital while paving the way for new operational models.

"This digitally native note issuance reflects the growing adoption of digital assets in financial markets. Citi is proud to be a key participant on this important benchmark. From execution and settlement to our work as issuing and paying agent, Citi's roles leverage the power of the bank's interconnected businesses to support clients through the full lifecycle of key transactions. Citi will continue to facilitate the issuance of digital bonds, unlocking the potential of digital assets for clients including efficient access to capital while paving the way for new operating models," said Richard Zogheb, Head of Global Debt Capital Markets at Citi.

"BMO Capital Markets was delighted to be involved in this milestone transaction for AIIB, in partnership with Citi and Euroclear. Digitalization is high on the agendas of issuers, investors and banks as the financial industry strives to increase efficiency and resilience," said Summer Hinton, Head of Global Markets International. "Here at BMO, digital is how we operate and we are pleased to see Debt Capital Markets continue to evolve in innovative ways which will be scalable in the future."

Key Transaction terms

Issuer	Asian Infrastructure Investment Bank ("AIIB")
Rating	Aaa/AAA/AAA (Moody's, S&P and Fitch), all stable
Issue Amount	USD 300,000,000
Status	Direct and Unsecured
Pricing Date	20 August 2024
Settlement Date	22 August 2024 (T+2)
Maturity Date	15 January 2027
Coupon	4.0%, Semi-Annual, 30/360, Following, Unadjusted
Re-offer Spread to mid swaps	+32 bps
Re-offer Price	99.904%
Re-offer Yield	4.0%
ISIN	XS2615318362
Listing	Luxembourg Stock Exchange's Regulated Market
Lead Managers	BMO and Citi

About AIIB

The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank whose mission isFinancing Infrastructurefor Tomorrowin Asia and beyond-infrastructure with sustainability at its core. We began operations in Beijing in 2016 and have since grown to109 approved members worldwide. We are capitalized at USD100 billion andAAA-ratedby the major international credit rating agencies. Collaborating with partners, AIIB meets clients' needs by unlocking new capital and investing in infrastructure that is green, technology-enabled and promotes regional connectivity.

About Euroclear

Euroclear group is the financial industry's trusted provider of post trade services. Guided by its purpose, Euroclear innovates to bring safety, efficiency and connections to financial markets for sustainable economic growth. Euroclear provides settlement and custody of domestic and cross-border securities for bonds, equities and derivatives and investment funds. As a proven, resilient capital market infrastructure, Euroclear is committed to delivering risk-mitigation, automation and efficiency at scale for its global client franchise. The Euroclear group comprises Euroclear Bank, the International and Irish CSD, as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden, Euroclear UK & International.

About Citi

Citi is a preeminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in its home market of the United States. Citi does business in more than 180 countries and jurisdictions, providing corporations, governments, investors, institutions and individuals with a broad range of financial products and services.

Additional information may be found atwww.citigroup.com| X:@Citi| LinkedIn:www.linkedin.com/company/citi| YouTube:www.youtube.com/citi|Facebook:www.facebook.com/citi

About BMO

BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.4 trillion as of April 30, 2024. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and inclusive society.

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