Bond Issue

Who uses bond issue?

Bonds are a useful way of financing commercial companies and their projects. They are suitable for companies that, for example, need to settle with members, finance acquisitions or development, buy real estate or technology, etc. They are most commonly used by 3 groups of issuers:

1. a company that, for whatever reason, does not obtain a bank loan (not having been in existence for long, unconvincing financial results);
2. a company that does not want to accept the conditions set out by the bank for credit financing, particularly when it comes to security;
3. a company that uses a combination of bank financing and partly (mezzanine financing) or fully provides the equity demanded by the bank through a bond issue.

What sort of issue is suitable for your company?

Bonds can be issued within three regimes:

1. a public below-the-threshold offering, when the volume of the issue may not exceed the equivalent of EUR 1 million; mainly used by smaller and medium-sized companies, which then advertise their offering online, or distribute it otherwise on their own accord;
2. a private offering, when the number of investors addressed with the offering may not exceed 149; bonds are generally not publicised and placed among private investors through individual negotiations;
3. a public offering with prospectus approved by the Czech National Bank, with no restrictions on volume or publicising. More detailed information about this regime can be found here.

Bond issues can also be made as:

1. uncovered, which is the most common method;
2. covered, for example in the form of a declaration of surety by owners of the issuer or covered by security interest in movable or immovable property; in such a case, however, it is necessary to use a security agent that guarantees investors the execution of the security for their benefit.

What will we do for you?

• we will recommend a suitable form of bond issue for you (public below-the-threshold, private, with prospectus)

• we will assign a project manager to you, who will guide you through the whole process and will regularly update you
• we will advise you on setting the specific parameters of the issue according to our practical experiences with clients
• we will arrange LEI for the issuer and ISIN for the bonds at the Central Securities Depository (CDCP)
• we will compile the terms and conditions of issue in accordance with the Bonda Act in force at that time
• we will prepare a contract for the bond subscription (contract with investors)
• we will propose the wording of certificated bonds
• in the case of book-entry bonds, we will handle the issue at CDCP
• in case of certificated bonds, we will compile a list of bond owners for you in accordance eith Bond Act
• we will inform you of the possible ways of offering bonds to end investors and subscribing

• we will provide you with a precise guide (structured procedure) for working with bonds, meaning that each and every employee at the company will be able to deal with them

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What will we need from you to do all this?

Information about your intentions, completion of a short form and approval of the parameters of the bond issue (denomination, interest, maturity etc.). We can deal with everything in person, by e-mail, or by telephone.

How long will it take?

Preparation of a turnkey bond issue without the obligation to compile a prospectus will not take longer than 7 days.

Whom have we helped to issue bonds?

We have prepared bond issues for, for example, experience agency TEPfactor, for example, developer MSI Capital (Moravská stavební – INVEST group), and the Volařík winery. We have, in fact, prepared more than 130 turnkey bond issues for our clients. You will find other references here.

How much will it cost?

The price depends on the requirements specified for the issue. You will receive a detailed written offer from us following a telephone or personal consultation.