MAPFRE has invested 35 million euros in the first structured green bond using blockchain technology to negotiate the terms and conditions, issued by BBVA Group. It is a private placement in a six year term bond linked to the evolution of the five year euro swap rate.
Structured bonds are negotiable assets with a fixed maturity and a return that can be based on interest rates, shares, an index, or an exchange rate. Furthermore, this kind of product is designed according to the required rate of return, terms, and risk tolerance of the investor, in this case MAPFRE.
This deal is particularly groundbreaking given its dual nature: it is both sustainable and high-tech. On one hand, the funds are earmarked to finance green projects within the BBVA’s framework of the Sustainable Development Goals (SDGs). As such, the bond has been categorized as green, according to the Second Party Opinion issued by DNV – a global leader in certification. On the other, the terms of the bond were negotiated on BBVA’s internally developed blockchain platform.
José Luis Jiménez, Chief Investment Officer at MAPFRE, explained that this bond “contributes to the diversification of MAPFRE’s investment portfolio, and it does so with an innovative and sustainable product – two qualities that fully align with the company’s investment policy.”
Juan Garat, BBVA’s Head of Global Sales noted: “With this deal, BBVA reasserts its firm commitment to both sustainable financing and new technologies. Using DLT – distributed ledger technology – for this transaction allowed us to simplify the processes and streamline the negotiation time frames, which is in line with our pursuit of excellence in customer service.”