A&O Shearman in Luxembourg has advised the joint lead managers on the European Investment Bank’s issuance of digital bonds on a platform developed and operated by HSBC Continental Europe (Luxembourg). The issuance was governed by Luxembourg law and facilitated by a private blockchain platform of the French Central Bank, as part of the ECB trials.
The EUR100 million, three-year bond was issued, recorded and settled using private blockchain-based technology, via HSBC’s tokenisation platform – HSBC Orion. The transaction took place within the context of the participation of the French Central Bank in the framework of the Eurosystem exploratory work to test distributed ledger technology for the settlement of wholesale transactions in central bank money.
The joint lead banks involved BNP Paribas (France), HSBC Continental Europe (France) and Natwest Markets plc (United Kingdom). Direct participant banks include BNP Paribas (Luxembourg) and HSBC Bank plc.
This transaction was led by A&O Shearman partner Frank Mausen and counsel Philippe Noeltner in Luxembourg.
Frank Mausen, partner in the A&O Shearman global financial markets practice, commented: “We are proud to have advised on another transaction that furthers the Eurosystem’s exploration of DLT for settling wholesale financial transactions in central bank money. The trials are progressing well, now involving 60 financial firms and four central banks from nine euro area countries, and placing Luxembourg’s innovative legal framework at its heart.”
Philippe Noeltner, counsel in the A&O Shearman global financial markets practice, added: “We strongly believe that DLT-based infrastructures will enhance efficiency and streamline financial processes globally and we are thrilled, as a firm, to have successfully guided our clients through this significant and complex transaction, and to play a pivotal role in this development.”
