Bond Issuance

What Are the Types of Bond Issuances?

Bonds can be issued in the following forms:

• Private Offering, where the number of addressed investors must not exceed 149. Bonds are typically subscribed by private investors without public promotion.
• Public Sub-threshold Offering, where the issuance volume must not exceed EUR 1 million.
• Public Offering with a Prospectus Approved by the CNB, without volume or promotional restrictions.

Bond issuances can also be categorized as:

• Unsecured, or
• Secured, typically by a lien on movable or immovable property through a security agent who guarantees the realization of the security for investors.

Green Bonds

Green or sustainable bonds are exclusively used to finance environmentally sustainable projects, focusing on investments in environmentally sustainable economic activities as defined by the EU taxonomy regulation.

Regulation (EU) 2023/2631 on European Green Bonds (EuGB Regulation) introduces the following types of bonds supporting sustainable economic activities:

• European Green Bond (EuGB) – At least 85% of proceeds must be allocated to economic activities meeting taxonomy requirements.
• Environmentally Sustainable Bonds – No minimum percentage of proceeds is required to be allocated to environmentally sustainable economic activities.

Green bonds may be of interest to certain types of investors (banks, funds) and can improve the issuer’s ESG rating.

Who Is Bond Issuance Suitable For?

Bond issuances are most commonly used in the following cases:

• The issuer, for any reason, cannot obtain a bank loan.
• The issuer is not prepared to accept the terms set by the bank loan, particularly regarding loan security.
• The issuer uses a combination of bank and bond financing – equity required by the bank for loan financing is fully or partially addressed (mezzanine financing) through bond issuance.

How Does the Bond Issuance Process Work?

• A project manager will be assigned to guide you through the entire bond issuance process.
• We will agree on the appropriate form of bond issuance (public sub-threshold, private, with a prospectus).
• We will prepare the issuance conditions, bond subscription agreement (agreement with investors), wording of physical bonds, and a list of bondholders.
• For dematerialized bonds, we will arrange for the registration of the issuance with the Central Depository.
• We will secure the issuer’s LEI and the bonds’ ISIN with the Central Depository.
• We will provide a detailed guide for promoting, offering, and selling bonds to investors.

What Information Do We Need From You?

• Information on the parameters of the bond issuance (volume, nominal value, interest, maturity, security).

How Long Does It Take to Prepare a Bond Issuance?

• Preparing a bond issuance without a prospectus approved by the CNB will take approximately 1 week.

What Is the Cost of Preparing a Bond Issuance?

The cost will depend on the parameters of the bond issuance. After a phone or in-person consultation, we will provide you with a specific written offer.

References

Key contacts

Zuzana Stuchlíková

Maxim Obuchov

Zuzana Neubauerová