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Eversheds Sutherland advises Warburg Bank on investment in Vonovia’s digital bond issuance

  • Germany

    26-01-2021

    Eversheds Sutherland has advised private bank M.M.Warburg & CO on the structuring and implementation of an investment in innovative digital bonds. The bonds were linked to tokens issued on the Stellar blockchain. The bonds were issued by the DAX company Vonovia SE via the digital market place firstwire. The transaction has a volume of EUR 20 million over a period of three years.

    The transaction constitutes a novelty on the capital markets: While tokenised bonds have so far mainly been issued by private investors outside the banking sector to finance real estate projects, Warburg Bank, as one of Germany's most important owner-operated banks, is the first to enable its institutional customers to benefit from the advantages of this technology.

    Warburg Bank purchased the entire issuance with the aim to make this innovative technology with quick, efficient and secure transaction handling more accessible for institutional investors. Blockchain technology enables the secure real-time transfer of assets. Eversheds Sutherland will also advise Warburg Bank with respect to the regulatory implications of the placement of the digital bonds to institutional investors.

    "Tokenisation is making its way into the institutional capital market", says Dr. Carola Rathke, Partner at Eversheds Sutherland. "We have been strategically focussing on blockchain technology for a long time and are therefore particularly delighted that we have been able to assist Warburg Bank with this pioneering project."

    "Eversheds Sutherland is one of a small number of law firms in Germany which can offer the comprehensive and sound expertise required to provide advice on digitalisation matters not only to FinTech companies but also to traditional banks such as Warburg Bank", says Sascha Schmidt, Head of FX and Fixed Income at M.M.Warburg & CO regarding the cooperation with the law firm. "You need a partner like that for this kind of project."

    Eversheds Sutherland expects that bond issuances on the blockchain will play an important role on capital markets in the future. "This development has been on the horizon for a long time", emphasises Thomas Tüllmann, Counsel in the Hamburg office of Eversheds Sutherland. "The question was which bank would be first to offer its customers a digital financial product which uses the advantages of tokenisation. Warburg Bank is leading these developments as a pioneering. This will increase pressure on its competitors."

    Eversheds Sutherland believes that this transaction confirms its strategic assessment: Tokenisation will technologically shape the financial markets of the future and thus also have a lasting impact on the legal advice for banks and financial service providers.

    The Eversheds Sutherland team was led by the Partner Carola Rathke and also included Thomas Tüllmann (Counsel) as well as Matthias Winter who works at the law firm's Digital Transformation Hub.

    The German Financial Services Group of Eversheds Sutherland supports financial service providers with respect to financing and capital market transactions, investments in complex investment products, regulatory matters and other aspects of banking, finance and capital market law. Its clients include banks, asset managers, payment services providers, FinTech companies, trading markets and central securities depositaries. The use of new technologies in the finance sector and the associated legal questions form a focus of its activities. Eversheds Sutherland's Blockchain and Crypto Assets team has received international awards such as at the British Legal Awards 2018 for the first successful Initial Coin Offering (ICO) in Great Britain.

    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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