Brightvine announce $147 million securitisation of subordinated debt

Blockchain the mysterious and fascinating technology upon which Bitcoin and many other cryptocurrencies are built. As our industry continues to grow, we see more and more applications for this new form of technology, which Satoshi Nakamoto invented when he wrote his Bitcoin whitepaper in 2008.

Today we interview Brightvine CEO Joe Vellanikaran about another one of these applications. Brightvine is a blockchain-powered fixed income platform that connects issuers of high-quality, real-world assets with digital investors.

Back in March, we interviewed Joe about the announcement of a partnership with Angel Oak Capital Advisors, the technology venture arm of Angel Oak Companies, an innovative mortgage solutions company. The goal of the partnership was for investors to leverage Brightvine’s platform as they explore new investment avenues.

Today they announced the first fruit of this partnership: a collaboration. This is the first-ever bank subordinated debt issuance powered by blockchain technology, called BFNS 2022-1, a securitization of $147.55 million of subordinated debt.

Naturally, I had some questions.

Coin Journal (CJ): For those who may be unfamiliar with your approach, could you summarize how exactly this fundraising and project running on the blockchain is an advantage?

Joe Velanikaran (JV): In a typical securitization, the process of reconciling up-to-date documents and data across multiple participants is a manual and laborious process. The Brightbine Portal allows each document to be instantly verified against the immutable record of the blockchain, ensuring that documents used by all parties are always accurate and up-to-date. A distributed ledger ensures that every time data points are updated, those changes are reflected in real time to all stakeholders.

CJ: We interviewed Brightvine and Angel Oak about their partnership announced in the second quarter of this year. This is your first collaboration, did you postpone it as a result of market contagion?

JVs: Our partnership with Angel Oak is progressing as planned. Since our last announcement, we have been actively working with Brightvine Portal to support a variety of asset classes that can take full advantage of the Portal’s key features, such as more efficient securitization. Processes, real-time data distribution between parties, and blockchain-verified documents.

CJ: How much has the chaotic situation and bearish turn of the past few months affected this partnership as a whole?

JVs: Despite the downturn in the crypto market, many large institutions have emerged as champions of blockchain technology in recent months. Creating a precise financial infrastructure makes more sense than ever before. We believe our partnership with Angel Oak and his BFNS 2022-1 results are the first of many exciting announcements in our long-term collaboration.

CJ: What are your thoughts on the recent signs of softening in the real estate market?

JVs: We are hearing pleas from government agencies and other organizations for the private sector to step up and help the housing market and that is what we are asking. , to increase the liquidity of mortgages, bonds and real estate. This will create a new technological infrastructure that can connect these markets to new forms of digital investors. Whether interest rates go up or down, people still need mortgages and our role is to help make the back end of that financial infrastructure more efficient.

CJ: Do you think many cryptocurrency projects will move into this cycle as they did last crypto winter?

JVs: What we are currently seeing in the cryptocurrency market is slight contractions and corrections as projects succeed (and fail), while traditional and cutting-edge companies alike prepare for the future of Web3. and As we emerge from this crypto winter, the next big wave of companies and products will also emerge. The winners will be companies that bridge the gap between TradFi and DeFi and create something new that enables digital transformation and ushers us into a truly decentralized future. .

CJ: How will the Fed rate hike, which clearly impacts mortgages, affect this collaboration and business model going forward?

JVs: If the Federal Reserve (Fed) raises interest rates, people won’t be able to afford loans, but the demand for housing and the need for mortgages won’t go anywhere. We believe the efficiencies and new demand that Brightbine brings to these markets will help reduce these rates over time.