Toyota Leasing first to issue debt using blockchain

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Toyota Leasing Thailand has become the first company to issue debentures through the blockchain-integrated distributed ledger technology. (Bangkok Post photo)

Toyota Leasing Thailand Co Ltd, the automotive leasing arm of Toyota Motor Thailand, has become the first company to issue debentures through the blockchain-integrated distributed ledger technology (DLT) under the Securities and Exchange Commission’s regulatory sandbox.

DLT is a digital system where asset transactions and their details are recorded in multiple places at the same time. Unlike traditional databases, distributed ledgers have no central data store or administrative functionality.

DLT acts as the centre for collecting data and documents of debenture holders. DLT essentially operates similarly to the role of a debenture holder registrar in Thailand’s bond market system and lets debenture issuers observe the real-time transactions of debenture holders.

At present, the Thai Bond Market Association (TBMA) has collected information on bond features and trading information, but it still does not have bond holder data. DLT will therefore help in collecting more information from bond holders, potentially yielding benefits for the debt securities industry.

In July 2018, the TBMA was reported to be studying blockchain technology for the bond registrar services platform for corporate bonds as the first development phase.

The second phase involved servicing and bond deposits, while the third phase is associated with structuring “Bond Coin” for the clearing and settlement system.

Toyota Leasing Thailand’s debenture value is worth 500 million baht and offered only to institutional investors and high-net-worth investors. The maturity period is 11 months and 29 days.

Bangkok Bank is the debenture underwriter and Bank of Ayudhya the debenture holder representative for this pilot project under the Register Service Platform Phase 1.

DLT will help the company via real-time notification of debenture holders through the registrar, subsequently enhancing transaction efficiency and easing the complicated issuance process in the primary debenture market, said managing officer Chuenkamol Boobphakam.