A first for Origin – and the bond market
This week, Volvo Treasury AB successfully completed a dual tranche, €1 billion syndicated benchmark bond issuance via the Origin platform.
This transaction is the first truly syndicated bond issuance on Origin, bringing together multiple banks and law firms to collaborate. Our platform was used as part of the documentation process, from preparing the initial termsheet through to listing on the Luxembourg Stock Exchange.
In this blog post, John Judeh – Origin’s Lead Product Manager focussed on the Documentation and Post Trade products – shares his thoughts on this landmark transaction.
This week marked the culmination of many years of hard work from our team. Bringing together multiple counterparties to issue a syndicated benchmark is a significant milestone for Origin, and I’d like to take the opportunity to explain what it took to get here.
The deal
For the first time ever, the Origin platform supported the documentation of a fully syndicated bond issuance, from termsheet to listing on the Luxembourg Stock Exchange.
We supported Volvo in issuing a dual-tranche €1bn benchmark bond, with their syndicate of banks, dealer counsel, and issuer counsel collaborating on the platform.
In practice, that meant 27 users on the trade. Origin was able to facilitate the collaboration through document creation, review, and signing workflows. The document suite created included the Termsheets, Final Terms, Subscription Agreement and Signing & Closing Memorandum.
By capturing the structured data within these documents, Origin was able to support digitally listing both tranches on the Luxembourg Stock Exchange with the click of a button.
A long journey
Over the past 3 years, we’ve worked with 57 issuers and 18 dealers to support 168 vanilla trades. Most of them were private placements, with a single dealer and issuer. This allowed us to work closely with each party to learn deeply about how they work.
Each trade taught us something new, and that knowledge has been fed back into our development process to improve the experience of using our platform. Every user is different and each issuer has specific documentation needs, so much of the feedback emphasised the need for flexibility.
The result is a flexible system designed to meet any documentation needs.
Building for flexibility
A few features of the platform deserve highlighting:
Issuers have a specific document setup for each trade type they want to support. The level of granularity is up to the issuer, with options about the documents produced and the data preferences.
Trades have flexible working groups, from allowing users to add a single person from their organisation, to adding many teams across many organisations – including issuers, banks and law firms.
Users can start using Origin at any point during a trade, from creating the indicative termsheet, to jumping straight to the Final Terms stage by uploading a termsheet created off-platform and letting us pull out the structured data.
Collaboration workflows are adjustable throughout the trade. Reviews and approval steps are optional, and signing can be done digitally using DocuSign or manually using wet ink.
We also provide API access to the trade creation and download of the trade data to facilitate more bespoke workflows.
Today, we’re delighted to be able to use this flexible tool to support syndicated bond issuance involving multiple organisations.
Syndicated issuances account for the largest volume (by $ amount) of issuers’ funding every year. So they’re hugely important. They are also the most complex type of transaction, involving the largest number of collaborators.
It’s particularly gratifying that we’ve been able to support this trade with no new features added to our product suite. This is a testament to the flexible and extensible tool that we’ve been able to build.
Big goals, small steps
They say a journey of a thousand miles begins with a single step, and we’ve made it this far by taking it step by step.
We didn’t start trying to support the most complicated trades, but rather the simplest. This allowed us to build trust with our customers and gather valuable feedback needed to build an excellent user experience. We’ve seen countless platforms try to shortcut this important work and fail as a result.
Today, we’re finding that this is paying back in spades. Other than the fantastic news of doing our first fully syndicated issuance, we recently began supporting structured notes using the exact same Documentation product.
The road ahead
The road ahead looks bright, and I’m excited to explore new horizons with the support of our customers and partners.
And let’s not forget our team. I’d like to take this opportunity to raise a glass to our talented designers, engineers, and testers that worked tirelessly on this. Talent wins games, but teamwork wins championships!
