Vonovia is further expanding the digitalization of its finance division. The residential real estate company issued a fully digital registered bond of € 20 million for the first time. It has a term of three years. Security tokens following the strictest security standards were used for the transfer of ownership of the bond. The transfer of ownership rights of real assets takes place on the established Stellar blockchain, which is used for transactions around the globe.
The transaction is a novelty on the capital market – Vonovia created the tokens independently using the online marketplace firstwire. Vonovia had already used the platform, which brings issuers and investors together directly and in real-time, to place a promissory note of € 50 million in September 2019.
In mid-December, the German cabinet approved a bill introducing electronic securities, in order to drive the digitalization of the German financial marketplace and fulfil a key requirement of the German government’s blockchain strategy for greater transparency, market integrity and investor protection.
“Digitalization provides us with the opportunity to finance ourselves faster, more easily and more cost efficiently,” says Helene von Roeder, Chief Financial Officer of Vonovia. The company has successfully financed itself via the capital market for many years and uses a broad range of financial instruments. “We want to test out the new technology to gain experience with it. It’s easy to imagine that it will play a significant role in the capital market in the future. Issuances are transparent and traceable in real-time, which guarantees a professional transaction standard. Additionally, we can use it to approach new investors around the globe.”
On the investor side, the tokens offer new perspectives for the banks and their customers. “Tokenization will significantly expand and structurally change the range of financial products and services,” says Joachim Olearius, spokesperson for the partners of the owner-operated M.M. Warburg bank. “We are pleased to have successfully conducted this transaction with an experienced issuer. This underlines the innovative power of our bank.”
Michael Dreiner, CEO and founder of the online marketplace firstwire, values the transaction as a milestone because, it introduces the use of tokens to the institutional capital market and has the potential to change bond markets considerably. “In light of the planned legislation of electronic securities, this transaction demonstrates how bond issuances can be conducted in the future. On firstwire, companies can now conclude their transactions digitally and in real time, meaning instant settlement and no multi-day settlement risk anymore.” firstwire carried out the technological implementation with its partner Bitbond.
firstwire is the web-based marketplace for debt financing. The Cologne-based FinTech company provides the international private-placement market with an independent platform that brings large mid-sized companies and corporations together with banks and institutional investors of all kinds under the slogan “Your market. Your community.” Find out more at https://firstwire.market/en/.