Russian Telco MTS, Sberbank Issue Commercial Bonds Using Blockchain Technologybr>
The transaction involved placing commercial bonds in the amount of RUB 750 million ($12M USD) with a maturity of 182 days and an annual coupon rate of 6.8% on the OTC market. The primary bond buyer was Sberbank.
To process the transaction, National Settlement Depository (NSD), a Russian non-bank financial institution, provided its own blockchain platform based on Hyperledger Fabric 1.1. NSD implemented a full Delivery versus Payment (DVP) settlement model, allowing it to transfer securities and funds simultaneously. NSD also added an option to change the composition of network participants to open the issue to more investors.
For the transaction, the issuer, the central depository, and the investor had access to a decentralized platform. The project provided confidentiality in working with accounts and considered the requirements of Russian legislation.
Andrey Kamensky, Vice President, Finance, Investments and M&A, MTS, said that MTS continuously tests and implements new technologies across a variety of business areas, including corporate finance. As such, it is important for them to accelerate the launch of innovative solutions and reduce test time.
“Today, with the participation of our partners, we have successfully executed the first commercial bond issue in Russia using smart contracts based on blockchain throughout the entire settlement chain – from security placement and cash receipt to fulfillment of all obligations to the investor,” said Kamensky.
Igor Bulantsev, Senior Vice President of Sberbank CIB, said the transaction confirmed the “reliability, efficiency, and security of the platform based on blockchain for complex structured transactions with securities.”