Cross-border team advises NatWest Markets on the first issue of electronic securities by the State of Saxony-Anhalt

Global law firm Norton Rose Fulbright has advised NatWest Markets N.V. in connection with the successful issue of state treasury notes (Landesschatzanweisungen) in the form of electronic securities by the State of Saxony-Anhalt on 11 September, 2024. This is the first issue of such electronic securities by a German Federal State (Bundesland).

NatWest Markets and the State of Saxony-Anhalt are participating in the Eurosystem's exploratory work on new technologies for settlement of wholesale financial transactions in this context. During a practical exploratory phase with interested market participants, wholesale transactions recorded on distributed ledger technology (DLT) platforms can be settled in central bank money. For this purpose, the German central bank (Deutsche Bundesbank) provides the technical solution "Trigger Solution" which links market DLT platforms to the Eurosystem's traditional payment system "T2" and thus enables the direct settlement of the cash leg of the transactions on the existing real time gross settlement (RTGS) accounts of the participants.

The state treasury notes have been issued as electronic securities in the form of central register securities (Zentralregisterwertpapiere) within the meaning of the German Electronic Securities Act (Gesetz über elektronische Wertpapiere; eWpG). They are registered in the central register maintained by the German central securities depository (Wertpapiersammelbank) Clearstream Banking AG as a component of its digital post-trade infrastructure "D7". In connection with the exploratory work, Clearstream provides delivery-versus-payment (DvP) settlement services using DLT.

The state treasury notes with an aggregate principal amount of EUR 50 million were underwritten by NatWest Markets N.V. as sole lead manager and placed with a professional investor.

NatWest Markets N.V. was advised by a team of Norton Rose Fulbright led by partner Christoph Enderstein (Debt Capital Markets) and Counsel Dr Michael Born (Debt Capital Markets/Financial Services, both Frankfurt).

Christoph Enderstein comments:

"We are delighted that NatWest Markets N.V. and the State of Saxony-Anhalt chose our team to advise in connection with this innovative transaction, the inaugural issue of electronic securities by a German Federal State."

The Norton Rose Fulbright team also included Associates Quynh-Anh Nguyen-Xuan and Miriam Dustmann (both Debt Capital Markets, Frankfurt), partner Peter Young and Counsel Julian Walley (both Debt Capital Markets, London) as well as Counsel Prof Dr Claus Pegatzky (Public Law, Frankfurt).

Norton Rose Fulbright’s Frankfurt debt capital markets team advises both investment banks and issuers in connection with national and international capital market transactions in the areas of debt capital markets and structured finance, in particular on bonds, electronic securities, commercial paper, covered bonds, structured bonds, securitized derivatives, hybrid instruments, registered bonds, Schuldschein loans and debt issuance programmes, as well as related regulatory issues including sustainable finance matters.