Bond loans. Asset securitisation

A bond loan and securitisation make it possible to turn future cash flows and company assets into a source of long-term financing. This approach is especially useful for a business with stable contracts, a portfolio of receivables or predictable revenue. Professional preparation of the income and expense calculation, issue structure and documents helps compare the cost of capital with a bank loan and investments.

TAXC Limited provides a full range of services for organising and supporting investment activity and corporate bond loans in Ukraine, providing clients with comprehensive services in development of a capital-raising plan, search for investors and carrying out a corporate bond issue.

Bond issue support

• development of a capital-raising plan;
• support of a bond issue;
• procedure for carrying out a bond issue;
• preparation of the full document package and support of registration of the bond issue with the National Securities and Stock Market Commission of Ukraine (NSSMC);
• support of accounting and reporting for securities transactions;
• preparation of documents following placement, redemption and fulfilment of obligations under the issue in accordance with current NSSMC rules.

Organiser services:

• formation of a group of placement participants and organisation of the securities issue;
• legal support of the issue;
• preparation of a prospectus or other placement document for investors depending on the type of offer;
• organisation of presentation of the issue to investors;
• support of admission of bonds to trading on the selected organised platform if this is provided by the placement structure;
• initial placement of bonds among investors — residents and non-residents of Ukraine, legal entities and individuals — within the applicable rules.

Secondary market support services:

• organisation of issue liquidity support on the organised or over-the-counter market in a form permitted by law;
• analytical materials on the issuer and issue;
• organisation of interest payments and bond redemption.

Organisation of depository services:

• support of interaction with the National Depository of Ukraine and depository institutions;
• organisation of accounting for rights to bonds in the depository system of Ukraine;
• support of interaction between the issuer and professional capital market participants.

Asset securitisation

Among financing schemes, asset securitisation is playing an increasing role. Securitisation is a method of raising financing connected with the issue of securities secured by assets that generate stable cash flows, for example a portfolio of mortgage or car loans, leasing assets or commercial real estate with regular rental income.

First of all, securitisation may be of interest to commercial banks with significant portfolios of similar loans, leasing companies, real estate funds and developers. Under certain conditions, it makes it possible to achieve the following goals:

• increase return on equity;
• diversify sources of financing;
• reduce the cost of financing raised if the quality of the asset pool makes it possible to obtain better terms for the issue;
• raise financing for a longer term compared with ordinary lending;
• manage capital adequacy requirements for banks within applicable regulations;
• distribute part of the credit or leasing risk among investors;
• continue earning profit from the credit or leasing portfolio through the difference between asset yield and the cost of financing raised;
• create a public credit history on the domestic or international capital market.

Securitisation work starts with an analysis of the economic justification of the transaction compared with other financing options.

As part of this work, we analyse the client’s long-term goals, asset portfolio, condition of information systems, legal and tax issues and other circumstances important for the transaction. Based on the preliminary project structure, consultations are held with rating agencies, investment banks and potential placement organisers to assess the possible rating and transaction costs.

The result of the work is a preliminary structure, economic model, and recommendations on whether the transaction is suitable and the further procedure.

Then we support:

• preparation and structuring of the transaction;
• development of documentation, analysis of accounting and tax aspects;
• selection of the lead organiser and other participants in the transaction, and coordination of their work;
• presentation of the issue to investors and closing of the transaction;
• fulfilment of ongoing requirements after placement of the securities.

Why is it better to contact us?

Financing is handled not by an abstract bank or investment company, but by specific specialists. The result depends on the experience of the team, quality of documents and ability to agree in advance the interests of the issuer, investors and professional market participants. TAXC works with capital market specialists and builds support around the client’s specific task.

Professional meetings and industry events remain a convenient way to meet potential partners, investors and consultants. For preparation of a bond issue, securitisation or participation in specialised business events, you can contact a TAXC specialist.