STAGES OF A BOND ISSUE (Part - 5)

STAGE 3: ISSUE - SIGNING AND CLOSING

 

Issue of the bonds is usually between one and three weeks after launch. On issue, the legal documents are signed by the relevant parties, the issuer delivers the bonds to the bondholders and the bondholders pay the issuer. This stage is divided into:

Signing - The subscription agreement is signed and prospectus approved by the listing authority.

Closing - Other documents are signed, the bonds are signed (authenticated and, if applicable, effectuated) and delivered to the bondholders and payment is transferred to the issuer.

 

Signing documents - The signing and closing memorandum sets out the procedures to be followed at signing.The documents that need to be dealt with at signing are:

Prospectus - The prospectus is dated and published on the signing date.

Subscription agreement - The subscription agreement is signed by the issuer and the managers. This creates a conditional contract between the issuer and the managers, under which the issuer agrees to issue and the managers jointly and severally agree to underwrite the issue providing certain conditions precedent are satisfied. The conditions precedent is usually that:

othe warranties made by the issuer at signing are still true at closing;

othe fiscal agency agreement or trust deed is signed;

othe global note is authenticated and delivered;

othe legal opinions are delivered;

othe comfort letters are delivered; and

oif the bonds are listed, that the listing has been approved by the stock exchange or listing authority.

Agreement among managers - This is signed by the managers, but is usually done privately between them rather than at the signing. The agreement may be signed by the lead manager under powers of attorney acting on behalf of the other managers.

Process agent appointment letter - The process agent appointment letter is signed by the issuer and process agent, and a copy given to the process agent, together with any of the documents referred to in the letter 

Escrow documents - Documents that are dated the closing date may be signed on the signing date and held in escrow (usually by the lead manager's lawyers) until the closing date. If the lead manager's lawyers hold documents in escrow prior to closing, they should ensure the arrangements are clearly documented in an escrow letter so as to avoid any potential liability they might incur while holding the documents.

 

If the issue is listed and admitted to trading on a stock exchange, certain other formalities may need to be completed to conform to the rules of the listing authority and/or stock exchange.

 

 

Contact us for all your financing/bond requirements.

Financial Products

Total Capital Solutions Ltd has strong relations with various Financial Institutions and can help companies acquire letters of credit, bank guarantees, proof of funds and performance bonds.

Credit Facility

A Credit Facility is a flexible financing structure in which GPG commits to purchasing shares of common stock directly from a company, at prevailing market prices, over a multi-year period - contact us for more information.

Prospectus Preparation

Our legal associate can prepare Prospectus both in English and German and handle the BaFin or FSA approval process.