UKRSIBBANK > Investment business

Organisation of issues and placements of corporate bonds

Growth of economy and industrial output in Ukraine as well as positive trends in the financial and stock market development allow large Ukrainian companies to finance their investment programs through issues of corporate bonds. Bonds are issued to raise funds from a variety of investors (individuals and legal entities, both residents and non-residents), which ensures a number of advantages of this instrument.

JSIB UkrSibbank offers a full range of services related to the organisation of bond issues, their placement and support in the secondary bond market.

Compared to other financial institutions of Ukraine, JSIB UkrSibbank has the best experience in successful placement of corporate bonds. This is confirmed both by a number of successful projects for the total amount exceeding UAH 1 billion and by the Bank’s continuous leadership in rating lists prepared by renowned Ukrainian business publications and agencies.

Corporate bonds represent an efficient instrument for long-term finance programs and offer the following opportunities:

  • varying terms to maturity: from several months to 3–5 years
  • cost of funds raising through bonds is usually lower compared to bank rates on loans
  • the bond issuer company creates a positive borrower’s image with a wide range of potential investors, which would help to reduce the borrowing costs of further issues
  • a bond issue does not require any collateral.

Corporate bonds provide the company with flexibility in its debt management:

  • when defining the issue structure, the issuer company can establish loan repayment periods based on cash generation by the investment project
  • the issuer enterprise can redeem its bonds before maturity
  • the issuer enterprise can manage yield on its bonds depending on the market situation and using the mechanism of offers
  • in the case the issuer is sensitive to changes in exchange rate of any currency, the interest rate on bonds may be linked to the exchange rate.

Any restrictions of bonds issues are applicable only to joint stock companies that can issue bonds for the amount not exceeding their statutory capital or the amount of collateral provided to the company for this purpose by third parties.

Services offered by JSIB UkrSibbank on organization and servicing of corporate bonds issues:

  • financial consultant
  • bond issue manager
  • underwriter
  • support of the secondary bond market
  • payment agent
  • depository services

Services of a financial consultant:

  • identification of the enterprise’s need in finance
  • identification of the parameters and structure of the bonded debt
  • identification of the best time to enter the bond market.

Services of the bond issue manager:

  • preparation of the bond issue prospectus
  • preparation of the investment memorandum for investors
  • registration of the issue information with the State Commission for Securities and Stock Market
  • obtaining the security code from the National Depository of Ukraine and opening the security account with OJSC Interregional Stock Union depository, listing the bonds on stock exchanges and with the PFTS
  • documentary support of the loan, preparation of the redemption consequences report and filing that with the State Commission for Securities and Stock Market.

Underwriter’s services:

  • rganization of an advertising campaign and a road-show for potential investors
  • primary placement of bonds with investors (hard underwriting, partial underwriting or best efforts underwriting)
  • distribution of bonds issued in documentary form through the Bank’s branch network
  • creation of an underwriter syndicate.

Secondary market support services:

  • organization of a secondary market: support of bonds liquidity both in the stock market and in the over-the-counter market by quoting buy and sell prices of the bonds
  • maintenance of a tough spread between quotations in the secondary market
  • market maker’s services
  • information support in the course of the issue and throughout the bond issue life.

Payment agent’s services:

  • payment of coupon income
  • redemption of bonds.

Depository services:

  • ssuer’s account management services
  • security custodian’s services.

Other services:

  • development of a model layout of bonds to be issued in documentary form (both registered and bearers’) and negotiating with the printing enterprise on behalf of the issuer.
Printable version