Yesterday the European Investment Bank (EIB) issued its third blockchain bond, a GBP 50 million three-year floating rate bond using the HSBC Orion bond tokenization solution. This is the first public bond issuance for Orion, which was unveiled last November, and the bond is the first sterling-denominated digital bond.
For the EIB, the bond is its third blockchain issuance and the bank is keen to encourage innovation. Previous issuances were on the public Ethereum blockchain through Societe Generale FORGE, and using the Goldman Sachs Digital Assets Platform.
The latest £50 million bond used Luxembourg law. It involved BNP Paribas, HSBC and RBC Capital Markets as joint lead managers, with the banks also acting as custodians and HSBC as the central account keeper.
One of the novel features of the bond is it is mirrored on a public blockchain for transparency purposes, although details are anonymized. The aim of transparency is to provide visibility about the liquidity for that bond.
Orion uses the Hyperledger Fabric enterprise blockchain.
“This is also the first public issuance on our tokenisation platform, HSBC Orion, which has opened up opportunities for faster processing and improved operational performance across fixed-income issuance,” said HSBC Head of DCM Syndicate EMEA, Asif Sherani. Orion uses a private permissioned blockchain. We have requested information about which technology is used.
A division of BNP Paribas also invested in the bond alongside Schroders.