The City of Lugano has launched its third digital bond—a CHF 120 million ($139 million) issuance—exclusively through the SIX Digital Exchange (SDX). Demand was high, with the nine-year, 1% coupon bond selling above par.
Once again, Lugano listed the bond on both the SDX and the primary SIX exchange. Investors can hold it in either the SDX digital central securities depository (CSD) or the traditional SIS system.
Leading the way
In a statement, the city noted, “Lugano has optimized its debt management strategy, securing more favorable financing that will bolster its financial stability for the medium and long term.”
Lugano was the first non-financial entity to use SDX, debuting a CHF 100 million digital bond in 2023—the first ever digital bond accepted by the Swiss National Bank (SNB) in its General Collateral Basket, potentially a global first for central banks in allowing digital bonds for repo agreements.
Future currencies
In February, the city issued another CHF 100 million bond, settling it with the SNB’s wholesale central bank digital currency (wCBDC). This latest bond will also settle via the wCBDC, marking the first issuance since the SNB extended its wCBDC pilot for two more years in June.
Basler Kantonalbank, Raiffeisen, J. Safra Sarasin, and Zürcher Kantonalbank led the issuance.
