European Investment Bank Issues Inaugural Digital Bond on a Public Blockchain.
Posted on 04/30/2021
On April 27, 2020, the European Investment Bank (EIB) issued its first ever digital bond on a public blockchain. The EUR 100 million 2-year bond, placed with key market investors, represents the market’s first multi‑dealer led, primary issuance of digitally native tokens using public blockchain technology. The project selected by Banque de France as part of its Central Bank Digital Currency (CBDC) sphere. The EIB launched a digital bond issuance on a blockchain platform, deploying this distributed ledger technology for the registration and settlement of digital bonds, in collaboration with Goldman Sachs, Santander, and Societe Generale. In a partnership with Banque de France, the payment of the issue monies from the underwriters to the EIB has been represented on the blockchain in the form of CBDC.
Vice President Mourinho Félix, European Investment Bank (EIB) in a press release stated: “Innovation at the EIB goes beyond the projects we are supporting. As a global leader in the green and sustainability bond markets, the EIB is clearly well‑placed to lead the way now in the issuance of digital bonds on blockchain. These digital bonds will play a role in giving the Bank a quicker and more streamlined access to alternative sources of finance to boost finance for projects across the globe.”
This transaction consists in the issuance by the EIB of a series of bond tokens on a blockchain, where investors purchase and pay for the security tokens using traditional fiat. The Joint Lead Managers will then settle the underwriting against the issuer using a representation of central money, the Central Bank Digital Currency (CBDC). The principal is expected to be repaid in commercial fiat at maturity. The transaction will use Ethereum, a public blockchain protocol.
Summary Terms and Conditions for the new bond issue
Issue Amount
EUR 100 million
Pricing Date
27 April 2021
Settlement Date
28 April 2021
Maturity Date
28 April 2023
Coupon
0.000%, annual
Re-offer Yield
-0.601%
Re-offer Price
101.213%
Governing Law
French law
Joint Lead Managers
Goldman Sachs, Santander, Societe Generale
Registrar, Fiscal Agent, Settlement Agent and Platform Manager
Societe Generale – FORGE
Legal advisers
Linklaters LLP (to EIB) and Allen & Overy LLP (to the joint lead managers)
Blockchain
Ethereum public blockchain
Source: EIB.
