EIB’s bond issue on ethereum tweaked the usual players’ roles

VIDEO | Financially, it was a normal euro bond. So how could it change the whole dynamic of the multi-dealer collaboration around the issuance, just because it was settled on a public blockchain? At Treasury 360° Nordic in June, Olivier Chapiteau of the European Investment Bank presented the interior of his team’s pioneering €100m issue from both operational and strategic angles. See the full 27-minute session.

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“It was back in 2019, and from a philosophical standpoint we had this idea that it would be nice to do it on a public blockchain. Because it’s a bit trickier from a compliance standpoint but, let’s say … it’s kind of cool,” says Olivier Chapiteau, representing Capital Markets, New Products and Special Transactions with the European Investment Bank.

With a mandate to drive innovation, his team initiated what came to be the world’s first multi dealer led, primary issuance of digitally native tokens using public blockchain technology – hitting the market in April 2021, with a two-year tenor. The EIB management was firm that it should replicate the financial structure and investor spectrum of the “normal” issuance as far as could possibly be, and the issue came to be led by Societe Generale, Santander and Goldman Sachs. A subsidiary of Societe Generale, Forge, came on as platform operator.

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So from the viewpoint of financial engineering and what the product would pay its stakeholders, it looked like a normal bond.

“But the fact that you bring the blockchain infrastructure in the middle, starts to put you in a spot where you have the same group of people you usually have, says Olivier Chapiteau.

“But some play the same roles they’ve always played; some start to play slightly different roles; new players come in; and some old players start to wonder how they’re going to keep their jobs. So that whole dynamic of how the issuance happens, and how we define the roles, is quite interesting.”


Treasury 360° Nordic 2022, on 9 June, gathered nearly 300 delegates at Clarion Hotel Copenhagen Airport, and 100 online.
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