Linklaters advises on the issuance by EIB of its first ever digital Climate Awareness Bond and Swedish Krona transaction
Linklaters has advised Crédit Agricole Corporate and Investment Bank (CACIB) and Skandinaviska Enskilda Banken AB (publ) (SEB) as joint lead managers of, and CACIB as central account keeper for, the issue by the European Investment Bank (EIB) on 19 June 2023 of its SEK 1,000,000,000 3.638 per cent Notes due 19 June 2025. The Notes are issued in digital form and held in digital securities accounts kept by CACIB under so|bond model, the sustainable and open digital bond platform built on blockchain technology launched by CACIB and SEB in April 2023.
The Notes were recorded on a novel public permissioned blockchain, known as the PoCR Network that operates on a proof of Climate awaReness consensus mechanism.
The Notes are registered on the Luxembourg Stock Exchange Securities Official List (LuxSE SOL) and displayed on the Luxembourg Green Exchange platform, known as LGX, making the issue the first native digital green bond to be displayed on the LGX.
The Notes are governed by Luxembourg law and were issued under the Luxembourg law dated 6 April 2013, as amended, which permits the issuance of dematerialised debt securities using distributed ledger technology.
The Notes may be transferred on the PoCR Network between Noteholders without any positive act by a centralised entity, albeit subject to the overarching control of the central account keeper. To that extent, this is the most decentralised syndicated digital bond issued in the euromarket to date. In addition, the use of the PoCR Network to record the Notes marks a new, positive alignment of digital issuances with ESG principles.
Linklaters’ cross-practice and multijurisdictional team advising on the matter comprised of partners Julian Cunningham-Day, Michael Voisin and Richard Hay, managing associates Henry Wells and Sam Quicke (all London), partner Nicki Kayser, consultant Delphine Horn, managing associate Laurent J Benoit and associate Cristina Fat (all Luxembourg), and counsel Laurent F Benoit and associate Sébastien Herbert (both Paris).
EIB were advised by Clifford Chance.
Nicki Kayser, Managing Partner of Linklaters, Luxembourg, says:
“Luxembourg has over the past years carefully adapted several legal texts to cater for the issuance of, the circulation of and most recently the granting of security interests over securities kept through distributed ledger technology. This new issue of dematerialised notes under Luxembourg law by the EIB is testimony that the Luxembourg legal framework is offering a flexible solution and is up to the challenge.”
Richard Hay, Partner and UK Head of Fintech at Linklaters, says:
“Our congratulations to our clients CACIB and SEB, and the EIB as issuer, for this highly innovative, ground-breaking transaction. This is another first in the digital bond markets, and a further development in the establishment of new market structures for digital securities. As a regulated instrument transferable by the holder on a decentralised network without positive steps by a central counterparty, this issuance pushes the boundaries of what has been thought possible to date in the capital markets.”
Michael Voisin, Capital Markets and Fintech Partner at Linklaters, says:
“We are delighted to have been involved in this first of its kind transaction, providing capital markets, data protection, fintech, outsourcing, regulatory and technology advice to the joint lead managers and central account keeper across a range of jurisdictions. Our global team worked hard to assist our clients navigate highly innovative and complex issues, including the recording of the Notes under the Luxembourg DLT laws using French central account keeper.”
