French Lender Societe Generale Issues $112 Million Bond on Ethereum

French Lender Societe Generale Issues $112 Million Bond on Ethereum 1

UPDATE (April 23, 20:45 UTC): This article has been updated to note that Societe Generale issued the bonds to itself, and to include other details from a rating agency report.

———

French financial services giant Societe Generale Group has issued about $112 million worth of bonds in the form of a security token on the public ethereum blockchain.

Announced today, a subsidiary called Societe Generale SFH used the OFH token (obligations de financement de l’habitat, or home financing obligations) to represent 100 million euros of covered bonds, a type of security that is backed by specific assets but remains on the issuer’s balance sheet.

However, according to a report published Tuesday by bond rating agency Moody’s Investors Service, Societe Generale was “the sole investor,” meaning the firm issued the securities to itself and no outside buyers were involved.

The bond has a five-year maturity with a 12-month extension period, Moody’s said.  It is pari passu (“on equal footing”) with other covered bonds of the issuer, meaning if the company were to fail, whoever held the tokens at that time would be repaid the same fractional amounts at the same time as regular bondholders, the report said.

The rating agency said it considers the use of blockchain technology “credit positive” for the issuer, in part because of increased transparency and a reduced likelihood of errors “arising from the complexity and the number of intermediaries involved in issuing covered bonds using traditional means.”

The pilot was designed by Societe Generale’s blockchain subsidiary Societe Generale FORGE, “one of the 60 internal startups launched via the Internal Startup Call, the Group’s intrapreneurial programme,” the company said.

Big Four professional-services firm PwC advised the project on the technology and the French law firm Gide Loyrette Nouel was a legal advisor, SocGen said.

“This live transaction explores a more efficient process for bond issuances,” the firm said in a press release, adding:

“Many areas of added value are predicted, among which, product scalability and reduced time to market, computer code automation structuring, thus better transparency, faster transferability and settlement. It proposes a new standard for issuances and secondary market bond trading and reduces cost and the number of intermediaries.”

Past experiments

Societe Generale has been involved in a number of enterprise blockchain projects. It was a founding member of the IBM-powered trade finance platform we.trade in 2017 and commodity trading platform Komgo SA in 2018.

Earlier this month, Societe Generale-owned private bank and wealth manager Kleinwort Hambros announced it had launched an exchange-traded note (ETN) with a focus on investing in blockchain companies.

More broadly, a growing number of enterprises have been experimenting with public blockchains, including big players, but issuing actual digital securities by a global investment bank is rare.

In September, the Austrian government announced a pilot to use the ethereum blockchain to notarize the auction of a government bond worth $1.3 billion.

Two months later, Spanish bank BBVA recorded a $150 million syndicated loan on ethereum, time-stamping data on a loan issued for Red Electrica, Spain’s national electrical grid operator.

Among startups, back in 2017, Nivaura initiated a bond denominated in ether for the London-based luxury retail startup LuxDeco.

Societe Generale building image via Shutterstock

About the author

E-Crypto News was developed to assist all cryptocurrency investors in developing profitable cryptocurrency portfolios through the provision of timely and much-needed information. Investments in cryptocurrency require a level of detail, sensitivity, and accuracy that isn’t required in any other market and as such, we’ve developed our databases to help fill in information gaps.

Related Posts

E-Crypto News Executive Interviews

Crypto Scams

Beanstalk Farms Loses $80M In A Massive DeFi Governance Flash-Loan Hack
Beanstalk Farms Loses $80M In A Massive DeFi Governance Flash-Loan Hack
April 23, 2022
Prove
Joon Pak Head of Crypto at Prove talks to Us about Crypto Fraud And More
April 11, 2022
Mintable
Mintable CEO Zach Burks Talks to Us about the Opensea Stolen NFTs and Their Recovery
March 21, 2022
Crypto Crime
Crypto Crime Surges To Record Highs As Thieves Follow Market Buzz – Chainalysis 2022 Report
February 24, 2022
Bots Circumvent 2FA Login At Coinbase And Other Crypto Exchanges In 2022
Bots Have Circumvented 2FA Logins At Coinbase And Other Crypto Exchanges In 2022
February 17, 2022

Automated trading with HaasBot Crypto Trading Bots

Blockchain/Cryptocurrency Questions and Answers

Russia
Roundtable Interview-What is the Effect of The Russia-Ukraine War on Cryptocurrency Prices?
March 4, 2022
GamStop
How Does Bitcoin Casino Work + 2021 Beginner’s Guide
November 8, 2021
Cryptocurrency
How to Buy and Sell Cryptocurrency
November 8, 2021
What Are Bitcoin Futures And How Will They Work In 2022?
November 4, 2021
Ethereum
The Unconventional Guide to Ethereum
October 28, 2021


CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin28,998 2.39 % 2.94 % 0.78 %
Ethereum1,830.8 4.86 % 7.54 % 4.41 %
Tether1.001 0.04 % 0.02 % 0.05 %
USD Coin0.9989 0.16 % 0.08 % 0.04 %
BNB310.58 3.16 % 6.73 % 7.75 %
XRP0.3885 2.11 % 3.99 % 4.41 %
Binance USD0.9998 0.02 % 0.22 % 0.18 %
Cardano0.9566 0.22 % 0.68 % 6.96 %
Solana44.10 4.58 % 10.49 % 11.38 %
Polkadot9.270 4.60 % 7.67 % 2.61 %

bitcoin
Bitcoin (BTC) $ 29,311.00
ethereum
Ethereum (ETH) $ 1,874.36
tether
Tether (USDT) $ 0.994358
bnb
BNB (BNB) $ 315.57
usd-coin
USD Coin (USDC) $ 0.999075
xrp
XRP (XRP) $ 0.389696
binance-usd
Binance USD (BUSD) $ 0.990647
cardano
Cardano (ADA) $ 0.493481
solana
Solana (SOL) $ 44.74
polkadot
Polkadot (DOT) $ 9.50