Societe Generale issued the first covered bond as a security token on a public blockchain

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Societe Generale SFH, the covered bond vehicle of Societe Generale, issued the first covered bond (EUR 100m) as a security token on a public blockchain.

On 18 April 2019 Societe Generale SFH, a subsidiary of Societe Generale Group, issued EUR 100m of covered bonds (“obligations de financement de l’habitat”
or “OFH”) as a security token, directly registered on the Ethereum
blockchain. OFH Tokens have been rated Aaa / AAA by Moody’s and Fitch
and have been fully subscribed by Societe Generale.

This operation
is the first pilot project developed by Societe Generale and Societe
Generale FORGE, one of the 60 internal startups launched via the Internal Startup Call,
the Group’s intrapreneurial programme. This startup experiments
disruptive business solutions using blockchain technology to develop new
digital capital market activities.

This live transaction explores
a more efficient process for bond issuances. 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.

The operation was made possible thanks
to the teams of the Finance, Legal, Compliance and Operations
departments of the Bank. Gide Loyrette Nouel was appointed as legal
advisor to the OFH Token issuer and PwC France and francophone Africa
was involved as blockchain advisor.

Innovation is at the core of
Societe Generale’s DNA and a priority of its Transform to Grow strategic
plan. The Group’s digital transformation speeds up using new
technologies to innovate and better serve its clients.

In the field of blockchain and Distributed Ledger technologies, Societe Generale has been involved for several years in numerous initiatives, such as we.trade, the first blockchain-based trade finance platform now available to all its corporate clients in France, or the launch of komgo SA to digitalise the trade and commodities finance sector through a blockchain based open platform.

image by Shutterstock

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