Plus   Neg

Spanish Bank BBVA Issues Blockchain-powered Structured Bond For Insurance Co.


Spanish bank Banco Bilbao Vizcaya Argentaria SA or BBVA, issued a structured green bond for Spanish insurance company MAPFRE, with the terms and conditions being negotiated using blockchain technology.

Structured bonds are negotiable assets with a fixed maturity and a return based on interest rates, shares, an index, or an exchange rate. They are designed according to the required rate of return, terms, and risk tolerance of the investor.

MAPFRE invested 35 million euros in a six-year term bond in a private placement linked to the evolution of the five year euro swap rate.

The terms of the bond were negotiated on BBVA's internally developed private blockchain network (Hyperledger). The negotiation of the structure and prices, and the creation of documentation for the bond are part of the same tool.

The use of DLT allowed BBVA to simplify the processes by reducing issuing time and ensuring that negotiations and agreements reached are traceable and immutable.

The automation of the negotiation process using blockchain minimizes operational risks and reduces the processing time from days to hours for negotiation and closing of the agreement conditions for the bond.

The blockchain platform also allows the client to choose between numerous product configuration options in a self-service approach, providing flexibility in terms of designing the bond to their needs.

BBVA will use the funds to finance green projects within its framework of the Sustainable Development Goals (SDGs).

The bond has been categorized as green, according to the Second Party Opinion issued by DNV GL - a global leader in certification.

In mid-December, BBVA also closed a 150 million euro or $170 million acquisition term loan with European automaker Porsche Holding using blockchain technology.

Earlier, the bank had partnered with Spanish tech consultancy firm Indra, and issued 75 million euros or $87 million in corporate loans through DLT and smart contracts. BBVA then signed a new 100-million-euro or $117 million long-term bilateral corporate loan in July using blockchain technology with Spanish civil engineering company ACS Group.

Following that, BBVA also renewed a credit line worth 325 million euros or $380 million, involving a revolving credit facility, using DLT and smart contracts in a deal with Spanish energy firm Repsol SA.

For comments and feedback contact: editorial@rttnews.com

Technology News

Follow RTT