On Tuesday, the European Investment Bank “priced its first ever £50m digital bond using a combination of private and public blockchains operated and accessed via HSBC Orion--the bank’s tokenisation platform,” the EIB stated. “It follows the recently adopted Luxembourg legal framework tailored to allow for the issuance, transfer and custody of dematerialised securities on distributed ledger technology (DLT) infrastructure.”
“The EIB’s role as the EU public policy bank goes beyond acting as an ordinary bank,” stated Ricardo Mourinho Felix, EIB vice president. “The time has come for further innovation in the financial sector, and we are pleased to issue the first digital bond in pound sterling on a private and public blockchain with the support of our counterparts. This new financial tool will provide additional capital flow that the EIB will invest in projects with global impact.”
The public blockchain provides transparency for the market, while the private blockchain provides a confidential, official record of ownership, the EIB said.
Joint lead managers, legal advisors
BNP Paribas, HSBC and RBC Capital Markets were named joint lead managers. “The BNP Paribas Securities Services business in Luxembourg, RBC and HSBC will act as custodians for existing clients who invest in this digital bond,” the EIB stated.
Clifford Chance, which advised the EIB, said that “the transaction will be the EIB’s first digital bond to be issued using a combination of private and public blockchains and its second digitally native bond issuance under Luxembourg law following the €100m fixed rate bond issued on 29 November 2022.”
The £50m (€56.6m) two-year bonds are expected to be issued on 2 February 2023, will have a floating interest rate, and are expected be listed on the Luxembourg Stock Exchange, according to Clifford Chance.
The EIB said that the joint lead managers were advised by Allen & Overy.