HAMILTON, Bermuda, May 1, 2024 – BermudAir, Bermuda's premier boutique airline, today announced it has completed a $1 million USD tokenised bond issuance, executed via Obligate, the leading on-chain capital markets platform, in partnership with global digital assets and cryptofinance firm XBTO Group (“XBTO”).
This innovative tokenised transaction is issued on the public blockchain Polygon, with all payments in the stablecoin USDC, offering a 15-month, 15% p.a. return for investors. BermudAir is the first airline to leverage cryptofinance capabilities with XBTO and Obligate to raise capital in the new tokenised credit markets, with XBTO acting as lead arranger and bookrunner.
This debt financing was identified as an opportunity to diversify BermudAir's capital management strategy. It will fund operational and resource enhancements for the airline, particularly related to route expansion, to cater to growing demand and consolidate its position in new markets.
"Even as a young airline, the funding needs of our business are rapidly evolving," said Adam Scott, Founder and CEO of BermudAir. “Having this kind of innovative financing in the range of available options works for us. The efficiencies of using fintech to raise capital in this way are self-evident, and we're pleased to be the first airline to do so with another Bermuda-based company that's already so well-established in the market."
“This milestone represents a significant first step towards enabling democratized access to funding and investment opportunities for both companies and investors alike,” said Philippe Bekhazi, CEO of XBTO. “The tokenised transaction showcases the forward-thinking approach taken by BermudAir and XBTO and sets the stage for similar future issuances. By leveraging the benefits of blockchain technology, this financing method offers increased speed, transparency, security, and
efficiency.”
“Our collaboration with BermudAir and XBTO highlights Obligate's strategic focus in enabling blockchain-based debt issuances,” said Tobias Wohlfarth, Head of Origination at Obligate. “This issuance demonstrates our platform’s capability to efficiently and securely connect issuers with investors in a regulated environment, reflecting our commitment to innovating the private debt market and expediting investment opportunities."
The bond is issued in USDC, a stablecoin pegged to the U.S. dollar and backed by U.S. dollar reserves such as cash and U.S. treasuries. USDC reserves are held in the custody and management of leading U.S. financial institutions, including BlackRock and BNY Mellon.
Launched last year, BermudAir has quickly expanded operations beyond three U.S. routes to include seven routes across the U.S. and Canada, including its latest additions Toronto, and Halifax. The airline operates over 50 flights per week on Embraer E175 aircraft featuring a dual-class cabin, with 14 seats in its business cabin and 52 seats in the economy cabin, and a focus on convenience, comfort, and exceptional service for all guests.
Since launch, BermudAir has increased flight capacity between Bermuda and North America, underscoring its commitment to supporting growth and year-round travel to Bermuda for both leisure and business travellers.