The EIB’s two-year digital CAB is denominated in Swedish krona (SEK), with a value of SEK 1bn and a fixed annual interest rate of 3.638%.
According to the transaction documents reviewed by Moody’s, the bond represents unconditional, direct, and general obligations of EIB, ranking equally with any present or future indebtedness of the bank. The assigned rating aligns with EIB’s long-term issuer rating of Aaa.
The green digital bond, issued by EIB on 19 June, utilises the so|bond model, an innovative and sustainable digital bond platform built on blockchain technology. This platform was launched in April 2023 by Crédit Agricole CIB and SEB.
The bond is notable as the first distributed ledger technology (DLT) bond to be registered on the Luxembourg stock exchange securities official List (LuxSE SOL) and displayed on the Luxembourg green exchange (LGX).
Crédit Agricole CIB serves as the central account keeper responsible for safeguarding the newly issued digital bond, while Caceis and SEB will handle custody of the bond on behalf of their investing clients. Additionally, Caceis will act as the paying agent for the issuance.
EIB received legal advice for this transaction from Clifford Chance, while the joint lead managers received advisory services from Linklaters.
The key distinction between the new digital CAB issuance and other existing EIB bonds is that recording and settlement will take place on a public, unrestricted, semi-permissioned blockchain-underpinned infrastructure.
Prior to this digital CAB issuance, EIB had issued its first digital bond on a blockchain in April 2021, followed by another issuance in November 2022, and a third bond in February 2023. All of these issuances were rated Aaa.
However, digital bond issuances still represent a small portion compared to EIB’s annual issuance volumes, which typically range from €45bn to €70bn.