The five-year bond makes AFC the first African institution to issue a digital bond that is listed, traded and settled through regulated digital-market infrastructure, the corporation said on Wednesday.
South Africa recorded Africa’s first tokenised corporate bond in 2024, but that transaction was issued through a private blockchain-based marketplace rather than the regulated Swiss exchange infrastructure used by AFC.
AFC’s latest bond carries a coupon of 1.4925%. It is listed for trading on the SIX Swiss Exchange and deposited with SIX Digital Exchange, which provides the clearing and settlement infrastructure.
The bond is structured as a tokenised security using distributed ledger technology. Ownership is recorded on a regulated digital register instead of relying exclusively on conventional securities records.
Proceeds will be used for AFC’s general funding requirements and to expand its capacity to finance infrastructure and industrial projects across Africa.
Swiss investors supplied most of the demand
About 90% of demand came from investors in Switzerland, while international accounts provided the remaining 10%.
Banks and other financial institutions represented 57% of the order book. Asset managers accounted for 37%, while hedge funds contributed 6%.
The composition shows that the transaction was driven largely by conventional institutional investors rather than cryptocurrency investors.
Digital bonds use some of the technology associated with crypto assets, but they remain regulated debt securities. Investors lend money to an issuer and receive interest before the principal is repaid at maturity, as with a conventional bond.
The difference lies mainly in how ownership, trading and settlement are recorded and processed.
By using distributed ledger technology, issuers and market operators aim to reduce manual reconciliation, shorten settlement processes and establish a shared record of transactions. The technology could eventually reduce some of the costs associated with issuing and administering bonds.
However, institutional digital bonds still depend on regulators, exchanges, banks and established settlement systems. AFC’s transaction is therefore closer to the digital modernisation of traditional capital markets than to a cryptocurrency fundraising exercise.
South Africa issued an earlier tokenised bond
AFC’s description of itself as Africa’s first digital-bond issuer requires qualification.
On 1 May 2024, South Africa’s MOS Uitreiker issued a R100 million tokenised corporate bond through Mesh.trade, a blockchain-based capital-markets platform.
The ten-year floating-rate bond was designed to finance the expansion of a private school network offering education in Afrikaans. Mesh described it as Africa’s first tokenised corporate bond.
That transaction means AFC is not the first African entity to issue any form of digital or tokenised bond.
AFC’s first applies specifically to an African institution issuing a digital bond that is listed, traded and settled through a regulated digital exchange.
Mesh subsequently received a South African crypto-asset service provider licence in July 2024. This was after the MOS bond’s subscription and issuance process.
The difference in market structure also illustrates the scale of AFC’s transaction. The South African bond targeted R100 million, while AFC raised approximately $430 million from predominantly institutional investors in Switzerland.
AFC overtakes World Bank transaction
AFC’s $430 million transaction is larger than the CHF200 million digital bond issued by the World Bank in 2024.
The World Bank transaction was the first Swiss-franc digital bond issued by an international organisation. It was listed on the SIX Digital Exchange and the traditional SIX Swiss Exchange.
The World Bank bond also tested settlement using wholesale central bank digital currency supplied by the Swiss National Bank.
AFC has now exceeded its size by 75%, making the African institution the largest international digital-bond issuer in the Swiss-franc market.
The transaction is AFC’s fourth and largest bond denominated in Swiss francs. Its previous deals included a CHF150 million green bond issued in 2020.
AFC also raised $500 million through a conventional five-year dollar Eurobond in June 2026. The corporation said the Swiss digital bond delivered funding at a competitive cost relative to that dollar benchmark.
African infrastructure meets digital capital markets
The bond was issued under AFC’s $5 billion Global Medium-Term Note Programme. Commerzbank acted as technical lead, while Deutsche Bank’s London and Zurich operations participated in arranging the transaction.
AFC has ratings of A with a positive outlook from S&P Global Ratings and A3 with a stable outlook from Moody’s. Those investment-grade ratings help it borrow at rates generally unavailable to most African governments and companies.
Established in 2007, AFC finances projects in energy, transport, telecommunications, natural resources and heavy industry. It has 48 member countries and says it has invested $19 billion across Africa since its creation.
The immediate significance of the bond is not that blockchain will solve Africa’s infrastructure deficit. The proceeds are not tied to a publicly identified project, and digital issuance does not automatically make capital cheaper.
Its broader significance is that an African development financier has executed a large tokenised transaction in a tightly regulated international market, with established Swiss investors providing most of the money.
If the format produces lower administrative costs and wider investor participation over time, it could create another funding channel for African development banks, governments and highly rated companies.