31 January 2023

EIB issues its first ever digital bond in pound sterling

• The £50 million digital bonds, which bear a floating rate of interest, are registered in a private blockchain that ensures privacy and efficiency, while a public blockchain mirror record provides increased transparency on an anonymised basis.
• The EIB has appointed BNP Paribas, HSBC and RBC Capital Markets as joint lead managers.
• The digital bonds will be held in digital securities accounts kept on HSBC Orion.
• The BNP Paribas Securities Services business in Luxembourg, RBC and HSBC will act as custodians for existing clients who invest in this digital bond.

Today, the European Investment Bank (EIB) priced its first ever £50 million digital bond using a combination of private and public blockchains operated and accessed via HSBC Orion – the bank’s tokenisation platform. 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 encrypted private blockchain serves as the record of legal ownership of the digital bonds and provides an operational framework to manage the floating rate instrument and its lifecycle events. The public blockchain is used for information purposes and provides increased transparency to investors and the market as to holdings of the digital bonds on an anonymised basis. The dematerialised digital bonds will be held in digital securities accounts kept on HSBC Orion. 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 pioneering vision of digital bonds intends to bring benefits to market participants by reducing costs, improving efficiency and allowing for real-time data synchronisation across participants.

EIB

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