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Blockchain as with structured bond issue

Spanish bond terms were agreed on blockchain

Insurance company Mapfre has put €35 million into the hands of bank BBVA for the six coming years, in a structured green bond issue that was negotiated over a blockchain network.

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”With this bond issue, the BBVA Group demonstrates that it has the means, knowledge, and commitment to provide its clients cutting-edge products based on the latest technologies and innovative sustainable solutions,” the bank group, which is Spain’s second largest, boldly states in its press release.

The news was picked up by media including blockchain-focused Cointelegraph.

First time

For BBVA this was the first occasion of issuing a bond where the terms and conditions were negotiated using blockchain technology.

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The bank describes structured bonds as negotiable assets which have a fixed maturity, and a return that could be based on interest rates, shares, an index, or an exchange rate. In this case the bond has a six-year term, and is linked to the five-year Euro swap rate. The bond has been stamped as green by certification company DNV GL.

Better – on four points

In a bullet-point list, in the press release, the bank sums up the intended advantages with the choice of blockchain as technical solution: It allows all participants access to the transaction, the client can choose between numerous product configuration options, it provides the client with flexibility in terms of designing the bond, it works for the simplest to the most complex products which enables a self-service approach, and it is an entirely digital process.

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