The most important participant in a bond issue is the Issuer of the bonds. The Issuer is the one with the ultimate need, to raise money and capital for its projects and acquisitions or for refinancing. All of the other participants are there to assist in raising the money.
Bond issues can be made by companies where they need to raise funds over a medium to long term.
There are typically many parties to a bond issue, other than the Issuer and the buyer;
- The Investment Banker also referred to as the Bond Underwriter. He markets the bonds to the public (or direct to closed parties) and agrees to buy the bonds from the Issuer and resell them to the Bond Purchasers. Often, the banker will assist in structuring the bond and preparation of the bond issue documents and may solicit bids from multiple underwriters. However, some smaller bond issues may be carried out on a closed-loop transaction where a bank or fund may agree to purchase the entire bond offering and therefore in such case the Issuer may choose to issue a single bond rather than multiple bonds.
- The Attorney. He will represent the Issuer in the financing and delivers legal opinion at the closing of the bond issue. The legal opinion will cover matters such as confirming the issuer is a valid entity that the officers and executives of the Issuer hold valid appointment, that the meeting of shareholders calling for the bond offering was properly carried out and that no litigation is pending against the Issuer.
- Bond Counsel. It is common practice for the Issuer to retain a bond counsel firm which specializes in bond issues and who will work with the Attorney with respect to legal issues and various aspects of the financing. Bond Counsel will co-operate with the Issuer and the Underwriter in structuring the transaction.
- The Trustee. This is a bank chosen by the Issuer. Once the bond issue is closed and completed, debt service payments are made by the Issuer to the bondholders through a paying agent or Trustee. If the bond issue ever goes into default, the Trustee usually represents the bondholders in remedial proceedings against the Issuer.
- Credit Enhancement. This is typically a bank or insurer. It will often make commercial sense for the Issuer to pay a third party to guarantee the bond issue. An insurance company may issue an insurance policy (or financial guarantee) guaranteeing payment of debt service on the bonds, or a bank may issue a Guarantee to underpin the bonds.
Undertaking a bond issue is a complex financial procedure that calls for expert knowledge in coordinating all parties to best serve the Issuer. SureBond Project Management Services can deliver all requirements to the Issuer and co-ordinate the bond issue. Taking your offering to the market place and ensuring that your bond issue succeeds to raise your company its financial requirement.
To discuss the intricacies of undertaking a bond issue and to discuss the benefits that it may hold for your business, please contact us in confidence where our expert team will be pleased to advise and offer the necessary consultations.
Debt restructure can take many forms. It may involve the creation of special purpose vehicles and securitization techniques, converting current debt into non-recourse loans, off-balance sheet. It may mean the renegotiation with existing lenders and the partitioning of encumbered assets.
With the objectives of the restructure firmly in mind, SureBond Project Management Services can create complex financial structures that minimize the impact of debt repayments, isolate potential bad debt and protect the company’s main assets from any form of claim or repossession. This type of debt restructure may be crucial for companies facing hard financial crisis.
Debt Restructure is not only for troubled or stressed companies. Debt restructure promotes financial health and assures financial efficiency.
When selling companies or parts of a company group, debt restructure may be crucial to aid the sale. To remove liens and charges over assets being used for cross-company guarantees and to isolate debt in a given subsidiary or separate corporate vehicle.
It is also important to track the best rates for borrowings and to ensure that corporate loans are properly match-funded; short-term assets are matched with short-term borrowings and long-term assets are matched with long-term borrowings. To be ‘rate efficient’ can assist in the company’s cash-flow.
Whatever the objective, SureBond Project Management Services can offer concrete advice and create the necessary structures needed for efficient and sustainable debt restructure.
Please contact us in the strictest confidence
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