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High yield bond indenture—trustee checklist

High yield bond indenture—trustee checklist Introduction High yield bonds are regulated by securities laws and, with very limited exceptions, are governed by New York law, no matter where the issuer is located. The bonds will be issued pursuant to an indenture, pursuant to which a trustee is also appointed to represent the interests of bondholders. For more information on high yield bonds, see Practice Notes: Introductory guide to high yield bonds and High yield debt in 11 jurisdictions worldwide. For an overview of the core transaction documents required to document a high yield bond issuance, see Checklist: Issuing high yield bonds—documents list. In addition to setting out the principal covenants of the issuer, the indenture contains provisions which are necessary for the administration of the high yield bonds and the performance by the bond trustee of its functions. The bond trustee is appointed primarily to perform administrative functions on behalf of bondholders pre-default and to take enforcement action on behalf of the bondholders where necessary. For a discussion of the...

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Trust deed—first time issuer's guide

Trust deed—first time issuer's guide What this Practice Note covers The aim of this Practice Note is to provide information and practical guidance on English law trust deeds to lawyers advising first time issuers of debt securities. This Practice Note focuses on first time issuers because debt capital markets documentation for subsequent issues tends to follow very closely the documentation which the issuer used for its first issue—the documentation stage of the first issue is therefore the time when an issuer and its advisers have an opportunity to consider the documentation in depth and (within the constraints imposed by accepted debt capital markets practice) to influence the form of the documentation. This Practice Note: • sets out the advantages and disadvantages of using trustees in debt capital markets transactions and the nature of the relationship between an issuer and a trustee, and then • explains the practical aspects of the main provisions usually found in trust deeds for debt capital markets transactions This Practice Note covers trust deeds...

Enforcement of debt securities

Enforcement of debt securities Who can enforce? The question of who can bring enforcement proceedings against a bond issuer depends principally on whether the issue of the bonds has been structured with a trustee or a fiscal agent. When a trustee has been appointed, the trustee is generally able to enforce on behalf of the bondholders. When a fiscal agent has been appointed, it is incumbent on the bondholders to enforce their rights against the issuer. The fiscal agent has no role in enforcement. For information on the key parties in a debt capital markets transaction, see Practice Note: Parties in an issue of debt securities. For more information on the different issues that arise based on whether the bond issue is structured using a trustee or a fiscal agent, see Practice Note: Parties in an issue of debt securities—Fiscal agent or trustee. Where the bonds are issued in global, rather than definitive form (as is invariably the case with debt securities issued in the international capital...

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Restructuring Agreement

Restructuring Agreement This Agreement is made on [insert day and month] 20[insert year] Parties 1 The Consenting Lenders (listed in Schedule 1); 2 [The Consenting Bondholders (listed in Schedule 2);] 3 [insert name of debtor company] a company incorporated in [insert country eg England and Wales] with company number [insert registered number] whose registered office is at [insert address]; and 4 [The Material Companies (listed in Schedule 3);] Recitals (A) On [insert date] the Company's directors announced a proposed restructuring of the claims of certain creditors of the [Company OR Group] following a period of financial difficulties. (B) On [insert date] the Company and certain creditors entered into a Standstill Agreement in relation to the proposed restructuring. (C) [On [insert date] the Company and certain creditors entered into non-binding heads of terms for the proposed restructuring of the Company.] (D) This Agreement set out the terms and conditions the Parties have agreed to give effect to the [principles set out in the non-binding heads of terms for...

Tax disclosure—bond issue offering document

United Kingdom Taxation General The summary set out below describes certain taxation matters of the United Kingdom based on the Issuer’s understanding of current law and HM Revenue & Customs (HMRC) published practice as at the date of this document, both of which are subject to change, possibly with retrospective effect. The summary is intended as a general guide only and is not intended to be, nor should it be construed to be, tax or legal advice. The summary applies only to persons who are the absolute beneficial owners of Bonds, who hold their Bonds as investments and who are resident and, in the case of individual shareholders, domiciled in the UK for taxation purposes at all relevant times. In particular Bondholders holding their Bonds through a depositary receipt system or clearance service should note that they may...

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What factors should a lender consider if it is asked to waive a default under a loan agreement?

What factors should a lender consider if it is asked to waive a default under a loan agreement? This Q&A discusses the factors a lender will need to consider if it is asked to waive an event of default under a loan agreement. The following Practice Notes provide further guidance on some of the issues that arise where a lender considers a waiver request: • Debt waivers, extending maturity and debt rescheduling • Covenant waivers and resets • Amendments, waivers and consents—overview; and • How to prepare to enforce security Summary This Q&A looks at the key issues for a lender faced with a request for a waiver of a default under a loan agreement. It discusses the provisions of the loan agreement that should be checked, the practical issues that a lender should consider and some items that might be included in any waiver agreement between the lender and the borrower. Doing nothing about a default Once a default occurs under a loan agreement, a...

Can an issuer amend the maturity date or duration of a bond?

Can an issuer amend the maturity date or duration of a bond? IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for DCM lawyers? [Archived] In this Q&A, it has been assumed that there has been no event of default, and so the notes have not been accelerated. An issuer of bonds is the entity wishing to raise finance in the debt capital markets. The issuer will appoint an agent or (more normally) a group of agents to carry out various administrative duties for it in connection with the issue. One agent will co-ordinate...

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Banking & Finance—November 2024 case round-up

Banking & Finance analysis: This News Analysis provides a summary of the cases we have alerted in Banking & Finance for November 2024.

Banking and Finance weekly highlights—21 November 2024

This week's edition of Banking and Finance weekly highlights includes: (1) the decision in Kireeva v Bedzhamov where the Supreme Court has unanimously dismissed Ms Kireeva’s (Russian bankruptcy trustee’s) appeal to overturn the Court of Appeal’s’ decision; (2) HMLR announces changes to addresses for business customers; and (3) HMT consults on the case for a UK Green Taxonomy.