German lender Berlin Hyp has announced it will issue the first Mortgage Pfandbrief to be structured on the basis of the German Electronic Securities Act and blockchain technology.
This crypto debt security is to have a nominal value of €100 mln and a term of three years. The pricing process for the bond is to be completed on 2 August 2024.
Teresa DreoTempsch, member of the board of management of Berlin Hyp with responsibility for capital markets business said: 'The digitalisation of the capital market is picking up speed.
'Given the high degree of efficiency, transparency and security they offer, blockchains will become increasingly important over the medium term as a technology for issuing bonds and managing all relevant processes throughout a bond’s entire life cycle.
'We want to support this development by issuing our first blockchain Pfandbrief, and we also plan to share with the capital markets the knowledge we gain from our experience here.'
The blockchain Pfandbrief will be issued in a syndicated transaction, with DekaBank and LBBW as lead managers. Both of these banks are part of the Sparkassen-Finanzgruppe and will act as custodian banks for the bond issue. DekaBank will also manage the crypto securities register.
The digital platform on which the Berlin Hyp crypto debt security will be issued and managed via the blockchain will be made available by SWIAT. The blockchain to be used is a private and permissioned blockchain with an algorithm that consumes a relatively low amount of energy.
'I’m pleased that we at DekaBank have been able to contribute to the success of this forward-looking transaction in many ways – as a lead manager, manager of the crypto securities register and a shareholder of the SWIAT fintech company,' said Martin K. Müller, member of the board of management of DekaBank.
It was also possible to get Metzler Bank on board as a key anchor investor for Berlin Hyp’s Blockchain Pfandbrief, the lender said.
'The proactive regulatory framework, as well as the latest practical tests relating to the digital euro that were conducted by the European Central Bank, have served to strengthen the digital assets ecosystem and have led to increased investment in such assets by institutional investors,' concluded Mario Mattera, member of the executive board of B. Metzler seel. Sohn & Co.
