4. Debt

4.1 The Bond Journey

4.1.1 Full Scope Bond Offering Process (Bond Offering with Prospectus)

Last updated: September 16, 2022

If the admission to trading of your Company’s bonds takes place on a regulated market and/or if the Offer takes place through a Public Offer, the Company needs to prepare and disclose an EU Prospectus (unless any of the exemptions referred apply). This section aims to present to potential issuers the roadmap to follow in those situations.

Usually, the Bond Offering process is developed in 3 phases, namely Planning, Preparation & Review and Offering & Placement:

Bond Offering & Listing

Planning

Preparation & Review

Offering & Placement

The Bond Offering planning should lay the framework for a successful Offer. In order to ascertain that a Bond Offering is the optimal choice (and if so, what is the best format for an Offer), Companies should diligently analyse and rank all available funding alternatives.

In this phase, it’s common to do the following steps:

Examine strategic alternatives and conduct a health check, preferably evaluate if the Company is perceived by Investors as suitable to proceed with the Issuance;
Consider the Eligibility Criteria for the available trading markets and determine the most appropriate market segment;
Select the key advisors who can help you throughout the issuance process.

It is advisable to hire advisors to perform and assist some of the tasks, such as due diligence (if needed) and the regulatory requirements (fillings and documents), adaptation of the financial information if required.

Main steps in this phase are the following:

Create a strong external Bond Offering team (bankers, attorneys, auditors, investor relations, and other advisers) and set a calendar for the Bond Offering;
Due Diligence (if needed);
Drafting of the Prospectus;
Engagement with the Regulator for the approval of the Prospectus with the Market Operator for the filling of the Listing Application;
Develop the Marketing and Communication Plan.

This is the last stage in the Bond Offering process and will culminate in the issuance of the bonds. This phase is key not only for the success of the Bond Offering but also for the Company’s relationship with Investors, as this is a period in which the Company will have a high level of exposure and Investors’ attention is highly focused.

The stages in this last phase are as follows:

Publicise the Offer to Investors and collect subscription orders through financial institutions;
Allocation of bonds to investors and settlement of the Offer.

Once you are knowledgeable about the required steps and with the help of experienced advisors, you should be able to navigate the Bond Offering process with relative ease. In this section you will find a detailed description of the 3 phases which culminate on the Bond Offering and listing of the bonds. Post-Listing in section “5. Life as a company with securities admitted to trading”.

A comprehensive timeline detailing main events during the process is presented here.