RBN Bond OTC Methodology

Ribbon Finance
2 min readAug 11, 2022

--

We recently passed a proposal to allow the treasury to perform OTC transactions with Ribbon bondholders to call the bonds early. The treasury will exchange the USDC raised for the bonds issued. In exchange for early liquidity for the bondholder, the treasury will only have to pay interest accrued to date instead of until maturity. The methodology for calculating the RBN CONVERT 04DEC2022 0.9C USDC / USDC rate is as follows:

USDC Borrowed: 3,000,000
Bond Supply: 3,103,224
Old Bond Price: 0.9667365295

Issue Date: Jun-07–2022
Maturity Date: Dec-04–2022
OTC Date: August-15–2022
Buffer: 2 days (interest accrued will include 2 days past OTC date)

New Bond Price Formula
Old Bond Price + ((1 — Old Bond Price) * (OTC Date + Buffer — Issue Date) / (Maturity Date — Issue Date))

New Bond Price: 0.9798571206

Interest Earned Formula
Amount of Bonds Bought * (New Bond Price — Old Bond Price)

Total USDC Earned Formula
Amount of Bonds Bought * Old Bond Price + Interest Earned

Total USDC Earned by bondholder

The RBN CONVERT 04DEC2022 0.9C USDC / USDC exchange rate on airswap is identical to the new bond price: 0.9798571206.

To stay updated on the latest updates from Ribbon, please follow us on Twitter or join our Discord.

--

--