Allen & Overy advises Teylor on innovative tokenisation of SME loans
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Allen & Overy has advised Teylor AG, a Swiss-based fintech lending platform, on the legal structuring and issuance of tokenised credit portfolio bonds under Luxembourg law.
The bonds are backed by loans to German small and medium-sized enterprises (SMEs) and can be traded on the Taurus Digital Exchange (TDX), a Swiss regulated marketplace for digital assets operated by Taurus Group SA, a Swiss crypto custody firm.
The bonds are issued in dematerialised registered-form under Luxembourg law, a type of issuance format that allows for non-intermediated issuances with a leaner legal regime and the possibility to be issued and settled on cross-border platforms. The bonds are represented by smart contracts on the Ethereum blockchain, enabling efficiency, transparency and potential for liquidity for investors.
This transaction demonstrates the potential of distributed ledger technology to transform the financing of SMEs and the secondary market for debt instruments.
The Allen & Overy Luxembourg team was led by partner Paul Péporté and included senior associate Philippe Noeltner and associate David Micheli. They worked closely with the Teylor and Taurus teams, as well as with the Swiss law firm Schellenberg Wittmer.