Banco Bilbao Vizcaya Argentaria (BBVA) has entered into a blockchain-based syndicated loan arrangement with Red Eléctrica.
Image: BBVA head-office building in Bilbao. Photo: courtesy of Zarateman.
As part of the €150m deal, granted by BBVA, BNP Paribas and MUFG, the partnership will deliver a syndicated loan using blockchain.
The deal allows the companies to explore potential applications of distributed ledger technologies. The whole facility’s negotiation process was closed over the blockchain network, which helped to enhance the process and ensure full documentation tracking and negotiation transparency.
For BBVA, the use of blockchain allowed to automate the process and minimize operational risk.
The deal was arranged over a private blockchain network and six entities participated in the process, including Red Eléctrica, three funding banks such as BBVA BNP Paribas and MUFG and two legal advisors such as Linklaters and Herbert Smith Freehills.
Each step of the negotiation leading to the signing of the final agreement is recorded in the DLT network along with a user code and the timestamp, which identifies the moment at which the event occurred.
All nodes involving in the private blockchain network can access and share the same relevant information of the negotiation process, enabling to ensure the immutability of the information.
After signing the contract, a unique document identifier is recorded in Ethereum’s public blockchain network to safeguard its immutability against third parties and ensuring its its confidentiality at all times.
Red Eléctrica CFO Teresa Quirós said: “this transaction is part of the our company’s initiative to push digital transformation and innovation as levers for growth and efficiency, enabling us to address the challenges that the changing energy environment represents to our company”
BBVA global finance head Ricardo Laiseca said: “BBVA is simplifying the processes related to corporate financing and is betting on the use of new technologies, like blockchain, to digitize loan negotiations and contracting.
“We work with our corporate clients to be able to provide them with the most innovative financing solutions.”
BBVA is a global financial group, which offers a comprehensive range of financial and non-financial products and services for the clients across the globe.