Siemens issues the first digital bond on blockchain for 60 million euros

The issuance of the bond on a blockchain offers a number of advantages over previous methods. For example, makes paper-based global certificates and central clearing unnecessary.. Furthermore, the good can be sold directly to investors without a bank having to act as an intermediary.

“Thanks to our innovative products and technologies, Siemens supports the digital transformation of its customers with great success. It therefore makes sense that we test and use the latest digital solutions in finance as well. We are proud to be one of the first German companies to successfully issue a blockchain-based bond. This makes Siemens a pioneer in the continuous development of digital solutions for the capital and securities markets.“, said Ralf P. Thomas, Chief Financial Officer of Siemens AG.

On Germany it is possible to issue digital bonds based on the blockchain since the entry into force of the blockchain law. Electronic Securities Act in June 2021..

Siemens used the new possibilities offered by the Electronic Securities Act and sold securities directly to investors without going through established central securities depositories. Payments were made using traditional methodsbecause the digital euro was not yet available at the time of the transaction, which was completed in two days.

“By moving to dematerialization and opting for public blockchains for the issuance of securities, we are able to . to execute transactions much faster and more efficiently than when issuing bonds in the past. Thanks to our successful cooperation with our project partners, we have taken an important step in the development of digital titles in Germany,” said Peter Rathgeb, Corporate Treasurer of Siemens AG. ” We will actively promote its development“.

“A+” ISSUANCE RATING.

S&P Global Ratings assigned this digital link a the issue rating of “A+”.. The rating agency said the bond is ranked pari passu with all other senior unsecured and unsubordinated obligations issued by Siemens.

In this regard, and because the transaction is based on a new technology that is not yet widely used in fixed income financing, and given that the crypto-asset ledger operates under a preliminary license, “we believe that the transaction involves certain new risks, namely operational, legal and cyber risks“, they noted.

However, they believe that ” they should be manageablein our opinion, and are fully reflected in our Siemens issuer credit rating (A+/Stable/A-1+).