Luxembourg/Frankfurt/Duisburg, 8 October 2024 -
NowCM, global technology leader in digital and automated bond issuance, and leading international law firm White & Case have teamed up to provide breakthrough technology and legal advice to the dated and manual commercial paper (CP) market by creating the NextGenCP for corporates and other CP issuers. Family-owned investment holding Franz Haniel & Cie. GmbH (Haniel) has led the way together with NowCM and White & Case in implementing this programme.
As a long-term, purpose-driven investor, Haniel aims to create value for generations. Led by Dr. Axel Gros, treasurer of Haniel, and Birgit Sommer, head of CP at Haniel, creating the NextGenCP reinforces Haniel's commitment to digital transformation, marking a significant step in modernizing the CP market.
The new set-up includes several wide-reaching innovations in technology and law:
- Fast set-up: NowCM has automated the setup of the NextGenCP based on White & Case's state-of-the-art legal work. This innovation significantly reduces costs and allows for the establishment of NextGenCP in a matter of days, rather than the traditional months-long process.
- High-volume facility: NextGenCP offers issuers the ability to conduct transactions with no volume limitations, for example Haniel aiming to reach three transactions per week. This supports high-frequency issuance, even several issuances in parallel, providing a streamlined and efficient process for managing large-scale CP programmes.
- Arranger-less set-up: The NextGenCP setup requires no arranger bank, addressing a problem in market structure where banks are often reluctant to engage in lengthy, burdensome processes with low or no fees. Instead, NowCM Luxembourg, as a regulated entity, acts as the arranger with support from White & Case, enabling deployment without the need for an arranger bank. This allows issuers and banks to focus on their core businesses while simplifying the process.
- Multi-dealer capability: Even though no arranger bank is needed, the NextGenCP operates in a traditional intermediated manner with dealer banks. It allows dealer banks to participate either in specific transactions or at the programme level, providing flexibility while maintaining the benefits of traditional market structures.
- Fully automated: The NextGenCP is fully automated in its operation, allowing dealer banks to simply email their trade confirmation to NowCM. All subsequent steps, including life cycle events such as settlement and repayment, are executed without human intervention, streamlining the entire process for maximum efficiency.
- Touchless: In the issuance process, there is no need for drafting or sending any documents. Everything is handled seamlessly through NowCM's cloud-based platform. If the issuer wants, an additional approval step before the issuance can be implemented, adding flexibility without complicating the process.
- Entirely digital: The CP, like all securities on NowCM's platform, is represented by a full digital twin in a machine-readable and structured format. This digital twin contains all relevant information about the CP, its lifecycle, and other metadata, which were previously only available in unstructured formats such as PDFs and Word documents.
- Golden source: NowCM's structured data and document repository serves as the golden source for all data related to the CP, enabling seamless integration with other stakeholders and IT infrastructure. This ensures error-free data transmission and supports digital issuance, including under the German Electronic Securities Act, further enhancing efficiency and compliance in the issuance process.
- AI-enabled: The process developed by NowCM incorporates the latest in AI technology, enabling fully automated, real-time handling of data.
- STEP compliant and ECB eligible: Like traditional CP, NextGenCP is STEP compliant and, consequently, ECB eligible making it suitable for collateral. By using NextGenCP issuers not only future proof their CP issuance but also ensure that all data required under the new ECB "Single Collateral Management Rulebook for Europe" (SCoRE) is readily available in machine-readable form.
- CP primary marketplace: NowCM operates the world's first and only fully regulated primary marketplace. The Paris-based multilateral trading facility (MTF), comparable to a German exchange Freiverkehr or the EuroMTF in Luxembourg, offers the possibility to digitalise the only remaining manual step in the value chain. Instead of negotiating trades via phone or chat, issuers and dealers can directly negotiate and transact on the NowCM MTF simplifying the issuance of CP to the push of a button.
- Optional - use of regulated issuance vehicle: For issuers looking to avoid all the hassle of managing the entire value chain of CP issuance, NowCM offers the use of its fully regulated issuance vehicle in Luxembourg, where NowCM takes over the entire issuance process.
Haniel is the first issuer making use of NextGenCP and has already transacted several tens of millions in various transactions since the recent go-live using NowCM's issuance vehicleunder the name "Haniel enkelfaehig".
Dr. Axel Gros, treasurer of Haniel, states: "We are very pleased with the implementation of this state-of-the-art CP programme. Leveraging NowCM's advanced technology and White & Case outstanding legal expertise, NextGenCP offers a process flow beyond straight-through process (STP), ensuring seamless execution from issuance to settlement to repayment, thereby helping us to efficiently manage our liquidity needs".
Karsten Woeckener, Head of Germany of White & Case and its DCM practice group leader, adds: "As a global law-firm that is supporting the latest technology we were delighted to support this project and to help unlock the German CP market. We certainly hope that the combination of our legal expertise, Haniel invaluable insights and NowCM's technology to create NextGenCP will attract many followers and usher a new age of funding in the money markets".
NowCM's founder and CEO, Robert Koller, says: "We are delighted to have brought NextGenCP to life with our exceptional partners at White & Case and the incredible support and innovation leadership of Haniel and, not to forget, the many dealer banks involved. The simplicity of using NextGenCP is based on more than a decade of research and development, a data model of thousands of variables and business rules, a highly secure cloud platform and above all the interaction with our clients who contributed countless hours and ideas. We will see further announcements soon on bringing the funding business into the 21st century."
Thanks to the successful collaboration between Haniel, White & Case, and NowCM, the implementation of NextGenCP sets a new benchmark for digital innovation in the industry. As the first of its kind, the touchless NextGenCP is poised to revolutionize the issuance and management of commercial paper and money markets, paving the way for more advanced and efficient funding processes and liquidity management. NextGenCP is also available for CP issuers with an existing programme that want to convert their issuance into a fully digital experience.
About Franz Haniel & Cie. GmbH
Franz Haniel & Cie. GmbH is 100 percent family-owned and has been based in Duisburg since the company was founded in 1756. It manages a portfolio of independent companies with the goal to create value for generations as a leading purpose-driven investor.
To this end, we align our portfolio strictly "enkelfähig," that means: along clear performance and sustainability criteria. Currently, the Haniel portfolio comprises ten investments: BauWatch, BekaertDeslee, CWS Cleanrooms, CWS Fire Safety, CWS Hygiene, CWS Workwear, Emma - The Sleep Company, KMK kinderzimmer, ROVEMA and TAKKT. In addition, Haniel manages a financial stake in CECONOMY and minority stakes in high-growth start-ups.
In 2023, the Haniel Group employed nearly 22,000 people and generated sales of EUR 4.4 billion.
About White & Case
White & Case is one of the leading international law firms and is present in the world's key economic centres at 44 locations in 30 countries. In Germany, around 250 lawyers, tax advisors and notaries work in Berlin, Düsseldorf, Frankfurt am Main and Hamburg).
About NowCM
NowCM is the leading market infrastructure and issuance provider within the primary debt capital markets. It offers an unparalleled, highly secure, cloud-native data platform for creating, negotiating, and managing debt, along with an end-to-end digital workflow platform. These tools enable all participants in the primary bond and CP markets to collaborate in real-time, fostering an open and cooperative environment. NowCM facilitate access to primary markets for inaugural and infrequent issuers through its Treasury-as-a-Service (TaaS) facility. This entity is regulated by the CSSF in Luxembourg and operates as a "funding subsidiary" using standardised yet flexible documentation and fully automated digital workflows. NowCM's 360-degree suite of services is completed by a multi-lateral trading facility (MTF) that NowCM owns and operates. It stands as the world's first and only regulated primary marketplace, subject to the supervision of the ACPR and AMF in France.
Connect with:
Franz Haniel & Cie. GmbH:
Website: www.haniel.de
LinkedIn: www.linkedin.com/company/franz-haniel-&-cie--gmbh
White & Case:
Website: www.whitecase.com
LinkedIn: www.linkedin.com/company/white-&-case
Media Contact:
Nils Repke
Senior Manager, Communications - Germany
Phone: +49 69 29994-1310
Email: nils.repke@whitecase.com
NowCM:
Website: www.nowcm.eu
LinkedIn: www.linkedin.com/company/nowcm
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Media Contact:
Kristina Kuzmina,
Chief Communications and Marketing Officer
Phone: +351 93247 8202
