French banking corporation Societe Generale Group issued bonds in the form of security tokens, using the public Ethereum blockchain. A division of the company used an OFH token to issue secured bonds for 100 million euros.
According to the investor services of the rating agency Moody’s, Societe Generale turned out to be the “sole investor” of the financial instrument and did not involve any third-party participants in its purchase. A bond is issued for a five-year term with a 12-month grace period. The security presented by a token gives its holder the same rights as that issued in traditional form.
Moody’s argues that the use of the blockchain can have a positive effect on the rating of a financial institution, in particular due to increased transparency and reduced likelihood of errors “resulting from the difficulties and the number of intermediaries involved in the process of issuing secured bonds using traditional means”.
PwC auditing company acted as a technology consultant for the project, while French law firm Gide Loyrette Nouel provided legal support.
“This real transaction demonstrates the possibilities of increasing the efficiency of bond issuance. It is expected that it will have a positive impact on many aspects, including product scalability, reducing time to market a tool, automatic structuring of computer code, increasing transparency, and accelerating the sending of transactions and settlements, ”the bank said.
Earlier this month, Societe Generale-owned private bank Kleinwort Hambros announced the creation of a stock note, intended for investment in the blockchain industry.