BBVA and Santander of Spain lend 150 million euros through decentralized network

• The operation was executed through the digital platform of ioBuilders.
• The system automates all contractual events from delivery to final amortization.

The Spanish energy company Iberdrola received a corporate syndicated loan of 150 million euros jointly granted by the banks BBVA and Santander of Spain. The operation was entirely managed through a distributed network (or "blockchain technology," in the words of the official statement) via the infrastructure developed by the firm ioBuilders.

In a syndicated loan, a group of financial entities comes together to provide capital to the same company and distribute credit risk. In this structure, one bank acts as the operational agent to coordinate the collection of interest, the flow of fees, and the monitoring of the contractual commitments established with the borrowing company.

"The operation constitutes a milestone for the financial market as it is the first real syndicated loan whose complete life cycle, from formalization and disbursement to the management of interest, waivers, amortizations, assignments, and maturity; is managed through this technology," indicates Santander. The digital architecture replaces the reconciliation processes between independent databases with a unique and immutable record.

The use of this network ---of which there are no further details and it is possibly a permissioned system developed by the involved parties--- is part of Iberdrola's strategy to digitize treasury processes. The shared platform allows for synchronized information among participants, reducing the risk of errors in data management and interconnecting entities under the supervision of the designated agent bank.

"Throughout the life of the loan, the platform coordinates the main contractual events, including the calculation and communication of interest, principal and fee payments, early amortizations, monitoring compliance with financial commitments (covenants) or agreed information, processing certain contractual authorizations, and the assignment of participation among financing entities."

According to the documentation from the promoting entities, the application of this infrastructure "simplifies the management of the life cycle of financing, reduces operational costs, improves coordination among entities, and increases the efficiency of one of the most relevant segments of corporate financing." They also claim that the technology can contribute to "increasing market liquidity and facilitating access to this type of financing for medium-sized companies."

This operation is particularly relevant in the context of the banking adoption of digital assets and infrastructures. As reported by CriptoNoticias, BBVA will participate alongside other banks in the Qivalis project. This consortium aims to issue a stablecoin denominated in euros. In parallel, Banco Santander is exploring with Bank of America, Barclays, BNP Paribas, Citi, Deutsche Bank, Goldman Sachs, MUFG, TD Bank, and UBS the issuance of digital money backed 1:1 by reserves and operational on public cryptocurrency networks.

Following the formalization of the financing granted to Iberdrola, the organizers plan to progressively incorporate new financial institutions. The goal set by the entities is to "modernize one of the most relevant markets in corporate finance, traditionally characterized by a high administrative burden and intense coordination among multiple participants, including the agent bank, financing banks, and the client."