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Matheson Advises on the First Digital Platform for the Issuance of Asset-Backed Commercial Paper

Matheson recently advised Landesbank Baden-Württemberg (LBBW) on the creation of the first digital platform for the issuance of commercial paper.

The Weinberg Capital programme, an asset-backed commercial paper (ABCP) programme sponsored by LBBW, was amended to enable the Irish conduit issuer to create and issue commercial paper using distributed ledger technology (DLT) based on the Corda platform.  The commercial paper is governed by Irish law.

This innovation reduces settlement times for commercial paper issued under the Weinberg Capital programme dramatically, from approximately two trading days to less than an hour.

The first commercial paper issued on the Weinberg Capital DLT platform was issued on 14 February 2019 and matured on 19 February 2019.  This represents the first time asset-backed commercial paper has been issued and redeemed using blockchain technology, without using a parallel paper-based process as a fall-back.

Following the successful completion of this initial pilot transaction, LBBW intends to further develop the Weinberg Capital DLT platform and issue commercial paper to a broader range of investors using the platform.

The transaction required close collaboration between multiple teams within Matheson, including its Finance and Capital Markets, Tax, Data Protection and Financial Institutions practice areas.  Matheson’s involvement was led by Christian Donagh, a Finance and Capital Markets partner, assisted by Andrew Gill and Alan Bunbury.  Christian said:

“As an Irish law firm we are proud to have been closely involved with the structuring and implementation of this innovative landmark transaction where Irish law played a crucial role.”

LBBW is one of the largest banks in Germany and, through its association with the Weinberg Capital programme, is also one of the leading sponsors of ABCP programmes in Germany.  LBBW’s press release about this transaction can be viewed here.