Corporate Bonds can be issued by any public company, foreign
public companies and supranational bodies: Rule 567 of the Securities and
Exchange Commission Rules.
Condition for
Approval of Corporate Bonds
The issuance of bonds by
public companies and supranational bodies shall be subject to the following
conditions stipulated in Rule 568 of the Securities
and Exchange Commission Rules:
a. Eligibility
of Debt Offering
i. Any public company, foreign public
company or supranational body is eligible to issue.
ii.
All necessary approvals (where
applicable) in relation to the issue, from other regulatory authorities shall
be obtained and filed with the Commission together with the registration
statement.
iii.
All issues of corporate bonds shall be
rated by a rating agency (optional for private placements.
v.
No Issuer shall offer bond if it is in
default of payment of interest or repayment of principal in respect of previous
debts issuance for a period of more than six (6) months.
b. Mode
of issue
Corporate bonds may be
issued by way of an offer for subscription, rights issue or private placement.
c. Resolution
There shall be a
resolution by the board authorising the issue of the bond and a resolution of
the general meeting resolution shall be required where:
(i)
The amount to be borrowed is beyond the
specified limit on the borrowing powers of directors in the Memorandum and
Articles of Association of the issuer;
(ii)
The bond to be issued is convertible.
Procedure for Issuing Corporate Bonds
1.
Convene a board meeting and pass a resolution
authorising the bond issue.
2.
A resolution passed at the General Meeting will be
needed if the amount to be borrowed is beyond the issuing
companies' borrowing limit or the bond is a convertible bond.
3.
The company will file a
registration statement accompanied by the following documents;
(a)
Duly completed Form SEC 6;
(b)
Appropriate filing and
registration fees;
(c)
Two (2) copies of the
board resolution authorising the issue of the bond or special resolution if
needed;
(d)
Two (2) copies of the
certified true copy of the Memorandum and
Articles of Association of the Issuer;
(e)
A copy of certificate of
incorporation of the issuer certified by the company secretary;
(f)
A signed copy of the
Issuers latest audited accounts for the
preceding three (3) years, with the latest account not more than nine (9) months old at the time of filing with the
Commission;
(g)
Reporting accountant
report;
(h)
Consent letters of the
parties to the offer;
(i)
Two (2) copies of the
draft vending agreement between the issuer and the issuing house;
(j)
Draft underwriting
agreement (where applicable);
(k)
Rating report by a
registered rating agency;
(l)
A letter of “No
Objection” from the relevant regulatory body (where applicable);
(m)
Two (2) copies of draft
trust deed;
(n) A draft prospectus, right
circular, placement memorandum or any form of information Memorandum with
specified contents in RULE 567(n)(i-xi)
(o)
Declaration by the issuer
on compliance with all requirements of the Act;
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