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Successful First Tokenised Bond Issuance in Africa

Financial markets are not meeting evolving demand

Traditional bond offerings, a cornerstone of corporate finance for generations, have failed to keep pace with the evolving needs of businesses and investors. Hampered by multiple intermediaries, manual workflows, and fragmented infrastructure, conventional debt capital markets are slow, opaque, and expensive.

Companies seeking to raise funds face a complex web of banks, law firms, and service providers, each adding to the overall cost. This cumbersome process constrains flexibility, with smaller enterprises struggling to find willing underwriters and larger issuers beholden to investment banks’ timelines.

Investor demand for more efficient access to a broader range of fixed-income products continues to grow. However, high minimum denominations, limited liquidity, and slow settlement times put many securities out of reach for most participants.

As these structural limitations persist, the need for a new paradigm in debt capital markets has become clear. Mesh’s blockchain-powered platform offers a compelling solution, enabling businesses to engage directly with lenders and investors in an open and dynamic marketplace.

 

The future of capital markets. Today.

In April 2024 Mesh facilitated Africa’s first fully regulated, digitally native bond offering. The issuer, Die MOS Inisiatief, a private school network dedicated to providing sustainable, high-quality Afrikaans education, raised R100 million to fund its ambitious expansion drive by leveraging Mesh’s leading-edge smart asset technology.

The MOS bond, paying a floating rate coupon of Prime +2%, represents a historic milestone for African entrepreneurs and offers a glimpse into the future of global capital markets. Mesh’s platform, underpinned by the Stellar blockchain network, seamlessly integrates every stage of the smart asset lifecycle, resulting in a more efficient, transparent, and accessible marketplace for issuers and investors alike.

For growth-minded executives, the MOS deal’s success demonstrates the real-world potential of the Finance 3.0 approach to funding. By digitising debt securities with Mesh, business leaders can access a broader pool of capital, streamline issuance, and significantly reduce costs, ushering in a new era of financial innovation.

 

Mesh’s smart asset solution

At the heart of Mesh’s innovative approach are smart assets – blockchain-based digital representations of real-world debt securities. When a company issues a bond on Mesh, the entire end-to-end process occurs within the platform’s technology stack, from origination to settlement. Each note is tokenised on the Stellar blockchain’s distributed ledger, enabling secure issuance, trade, settlement and servicing throughout an asset’s lifecycle.

This digitally native asset structure unlocks powerful benefits for issuers. Smart contracts automate key processes like coupon payments and redemptions, minimising manual touchpoints and the risk of human error. Immutable transaction records enhance transparency for all stakeholders, while the elimination of intermediaries such as a separate central securities depository streamlines the process.

For investors, fractional ownership dramatically reduces minimum investment sizes, opening access to a much broader investment basket. Instant settlement enables unprecedented liquidity, allowing investors to react swiftly to market changes and optimise their allocations.

Mesh’s easy-to-use platform puts issuers in full control, enabling them to structure deals, set auction or subscription terms, and distribute assets to a global network with just a few clicks. Real-time dashboards and a unified data architecture ensure that all parties work from a single source of truth, enhancing transparency and facilitating better decision-making.

 

MOS bond issuance

The MOS bond offering in April 2024 showcased the transformative potential of Mesh’s smart asset platform. Seeking to fund its expansion into new campuses, MOS chose a 10-year, Rand-denominated floating-rate Note, partnering with Mesh to digitise the deal.

With a target size of R100 million, a two-week bookbuilding window, and a minimum denomination of R5 000, the offering attracted a diverse pool of investors. TAKKE, an education, arts and culture Trust within the well-known Dagbreek Trust family, provided underwriting and a guarantee for the raise, giving investors an extra layer of security.

The issuance response was very positive, with broad public participation ranging from smaller retail investors to larger high-net-worth individuals,, from small companies to large institutions. Investors praised the accessible, efficient digital bond subscription experience, with the platform’s speed and ease of use drawing in many first-time bond investors.

 

Conclusion

The issuance of the MOS bond carries significance that extends far beyond one company or geography. By proving the viability and advantages of digitised debt securities, Mesh has opened the doors to a new era of financial markets. As the global momentum towards a Finance 3.0 future reshapes the debt capital markets landscape, Mesh has demonstrated its commitment to enabling this transformation.

The future of open capital markets is here, built on Mesh. Corporate leaders face a choice: cling to yesterday’s intermediated capital markets or embrace tomorrow’s faster, fairer, and more open ecosystem. For visionary executives, the smart choice is clear.

Mesh. Open capital markets