What is Bitbond and KlickOwn's conjoined real estate-back security token offering?
Recently, Bitbond announced a partnership with KlickOwn to offer real estate-backed bonds tokenized on the Stellar blockchain. The offering, which could kick off as early as January 2020, will be open to retail investors with a minimum investment of €10.
Based in Berlin, Bitbond is an online lending platform that helps small businesses receive loans from both institutional and retail investors. Earlier this year, Bitbond received regulatory approval from Germany’s securities watchdog — BaFin — to issue tokenized bonds. The company went on to raise more than €2.1 million through its very own Security Token Offering (STO).
Now, Bitbond is partnering with property investment platform, KlickOwn. The deal is set to include an STO featuring a real estate-backed digital bond. The asset will be issued on the Stellar blockchain, with the offering expected to kick off in early 2020, possibly in January.
Here’s how it will work: digital bonds will be listed with a corresponding ISIN number. Ownership of the bonds will be represented through security tokens. According to Bitbond, the entire process will be regulated by BaFin and each token will always be linked to the ownership of an asset. In this particular case, the tokens will correspond to bonds which are registered in an actual land registry.
The offering will be open to retail investors. The minimum investment will be just €10. All investors will receive periodic interest payments. Currently, interest rates are expected to fall in the 4% – 7% range, per year. The tokens are likely to have a term of three — ten years. Once the term ends, KlickOwn will pay back the principal.
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