Regulatory requirements in quoting debt securities
In offering debt securities for issue and quotation, listed entities need to comply with the:
- Fundraising provisions in Ch 6D of the Corporations Act 2001;
- Requirements relating to offers of debentures in Ch 2L of the Corporations Act; and
- ASX Listing Rules including Guidance Note 34.
Simple Corporate Bonds and opportunities for issuers
Recent legislative change now allows a simplified two-part disclosure document for issuers of listed, high-quality Simple Corporate Bonds - "SCBs". To be elegible, the bonds must be:
- Ranked senior unsecured and be pari passu with other senior unsecured debt;
- Unsubordinated, except to secured debt;
- A$ denominated;
- Pay a fixed or floating rate of interest;
- Have a first tranche with a A$50 million minimum offer size;
- Listed on a recognised exchange such as ASX;
- No longer than 15 years to maturity.
If elegible, the issuer can take advantage of a 2-part prospectus regime with the the "Base prospectus" having a 3-year "life".
For more information, please review the document - "Simple Corporate Bonds - Simple facts..." from King&Wood Mallesons.
Listed entities compliance information
To protect the integrity of the market, ASX has standards for the behaviour of listed companies through its Listing Rules. The Issuers business unit makes day-to-day decisions about the application of the ASX Listing Rules. Guidance notes are also published to assist listed companies and their advisers to understand how certain listing rules and procedures operate.
The main ASX Listing Rules threshold requirements for debt issuers are:
- The company must be a public company limited by shares, a government borrowing authority, a public authority, or an entity approved by ASX.
- The company must satisfy either (a) or (b):
a. Have net tangible assets of at least $10 million.
b. The company’s parent entity has net tangible assets of at least $10 million and will unconditionally and irrevocably guarantee all debt securities to be issued by the company for the period of quotation. The company’s parent entity will also need to provide to ASX copies of its annual accounts for release to the market.
- The company must apply and be granted quotation of all the securities that are in the class for which it seeks quotation.
Other listing rules apply to Debt Listings. Particular attention is drawn to Listing Rules 1.8 - 1.10, which deal with Debt Listings.
- For more information about hte benefits of listing and quoting debt on ASX, please download "A simple guide to listing debt on ASX".
- Confused about security descriptions? Consult the definitive guide - Security descriptions for debt securities listed on ASX.