Securities finance trade of a digital bond issued on a public blockchain initiated by Societe Generale and SG-Forge
Societe Generale and its subsidiary Societe Generale-Forge have realized a security finance transaction on a digital bond issued on a public blockchain, in cooperation with a German asset manager.
Initially, the European Investment Bank (EIB) issued in April 2021 its first ever digital bond on the public blockchain Ethereum, in collaboration with Societe Generale and its regulated subsidiary Societe Generale-Forge. Societe Generale placed some of the digital bonds to a top tier German-based Asset Manager. Following the placing transaction, Societe Generale offered the client to enter into a collateral upgrade trade to optimize the holding of the EIB digital bond. This is the first time that a Digital Bond was borrowed via the blockchain and collateralized on a triparty agent on the back of a traditional contractual setup.
In the coming months, issuances of bonds on a public blockchain are expected to increase sharply. With this new transaction, Societe Generale Group, thanks to its structuring and engineering capability within its capital markets departments and Societe Generale-Forge, has built experience down the value chain in borrowing back a digital bond issued and distributed a few months ago. This secured financing trade is a great example of innovative use cases and gradual industrialization related to digital securities on distributed ledger technology.