Another day, another blockchain first.
As part of a $ 39.7 million investment in FAT Brands, owner of the fast casual Fatburger restaurant chain, DBRS Morningstar noted titles issued on a blockchain for the first time. Ethereum, to be precise.
As reported by Forbes on Sunday, the Toronto-based rating company – which claims to assess the investment assets of more than 2,600 issuers worldwide – has in fact assessed a traditional debt obligation backed by royalty fees. franchise and upfront fees from Fat Brands companies, which also include Buffalo. and Ponderosa Steakhouse.
Security, however, has been structured to include multiple Ethereum tokens in the investment process. With the help of Cadence, a New York-based structuring consultant, ERC-20 tokens representing the debt security digitally were issued to all investors’ portfolios on Friday, with transactions recorded on the Ethereum blockchain. Quarterly payments will follow in the same way, according to Forbes.
Morningstar is quoted as saying in its rating that using Ethereum would speed up access to security data and increase transparency.
For the blockchain side of the investment process, $ 40 million in CDG, a stable coin linked to the US dollar, was held by the trustee, UMB Bank, while FAT Brands held other tokens representing two tranches of the debt security. .
A smart contract completed settlement of the transaction, passing security tokens to investors and $ CDGs to FAT in transactions visible on blockchain explorers.
“This is certainly the first securitization to be rated with a digital asset, and we are using it as intended: to provide this level of transparency,” Nelson Chu, founder and CEO of Cadence, told Forbes.
Cadence has already issued more than 60 blockchain titles on Ethereum, but none have been noted.
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