French Lender Societe Generale Issues $112 Million Bond on Ethereum
French financial services giant Societe Generale Group has issued about $112 million worth of bonds in the form of a security token on the public ethereum blockchain.
Announced today, a subsidiary called Societe Generale SFH used the OFH token (obligations de financement de l’habitat, or home financing obligations) to represent 100 million euros of covered bonds, a type of security that is backed by specific assets but remains on the issuer’s balance sheet.
However, according to a report published Tuesday by bond rating agency Moody’s Investors Service, Societe Generale was “the sole investor,” meaning the firm issued the securities to itself and no outside buyers were involved.
The bond has a five-year maturity with a 12-month extension period, Moody’s said. It is pari passu (“on equal footing”) with other covered bonds of the issuer, meaning if the company were to fail, whoever held the tokens at that time would be repaid the same fractional amounts at the same time as regular bondholders, the report said.
The rating agency said it considers the use of blockchain technology “credit positive” for the issuer, in part because of increased transparency and a reduced likelihood of errors “arising from the complexity and the number of intermediaries involved in issuing covered bonds using traditional means.”