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Blockchain Updated: 14 Dec 2018

BBVA and Porsche Holding close an acquisition term loan using blockchain technology

BBVA and Porsche Holding Salzburg, the largest and most successful automotive distributor in Europe and a subsidiary of Volkswagen AG, closed a €150 million term loan backing strategic acquisitions in the retail distribution network in Europe and Asia.

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This is not only the first acquisition term loan ever arranged through blockchain technology, but Porsche Holding is also the first non-Spanish borrower using this technology for the negotiation and closing of a corporate loan. This pilot used the platform developed by BBVA based on distributed ledger technology.

Blockchain offers a better client experience by automating the negotiation process and minimizing operational risks, thanks to the inherent characteristics of the technology. Since speed of execution is essential to the success of acquisition finance transactions, the use of the distributed ledger technology is particularly relevant. Blockchain technology also ensures traceability and immutability making the documentation process safer and more transparent.

This new transaction reaffirms BBVA’s and Porsche Holding’s positions at the forefront of the application of new technologies in their organizations. The use of blockchain for the arrangement of this facility has demonstrated the extent to which new technologies can provide a leap in efficiency in financial markets. This new transaction also strengthens a long lasting commercial relationship between the two institutions.

Frank Hoefnagels, Head of BBVA CIB in Germany, said: “This transaction is all about putting blockchain technology into meaningful practice in the interactions with our clients. Our aim is to improve clients’ experience by simplifying processes and enhancing the speed of execution. To be on a common path with our longstanding partner Porsche Holding makes us equally proud”.

"Our aim is to improve clients’ experience by simplifying processes and enhancing the speed of execution"

Dominik Paschinger, Branch Manager of Porsche Corporate Finance in Belgium, said: “With digitalization being an integral part of Porsche Holding’s Strategy 2025, the goal is to advance in all fields of activity. We think that the blockchain technology has great potential and are therefore very excited to being able to explore the technological capabilities together with BBVA”.

Digital transformation, also in corporate loans

BBVA is leading the transformation of the financial sector, innovating both in its financing products and in the digitization of its solutions to enhance its business and customers’ experience.

In wholesale banking, BBVA’s objective is to offer to its corporate clients, not only the most appropriate financial solutions, but also cutting edge innovation and technological capabilities, such as blockchain.

BBVA’s wholesale banking unit is pioneering efforts to harness the advantages offered by the technology to increase the agility and transparency of its core products, such as corporate financing, and thus progress towards a Do It Yourself (or DIY) financing model for its business and corporate clients.