The new ASX guidance on debt securities should facilitate (and clarify the process for) the listing of entities as debt listings rather than equity listings, as well as the quotation of additional debt securities. According to the ASX, a debt listing will bring with it access to one of the world’s largest investment pools, price discovery in a deep and liquid market and the trading platform and clearing and settlement infrastructure of the ASX. In addition, the quotation of debt securities on the ASX will broaden the pool of potential investors to include investment managers whose mandates limit them to investing in listed securities and may also help to attract an exemption from Australian withholding tax and make them more appealing to foreign investors.
The ASX has issued 2 new Guidance Notes relating to debt securities:
Guidance Note 29 on Applying for Admission – ASX Debt Listings – Guidance Note 29 provides guidance to assist entities wishing to apply for admission to the official list of ASX as a debt listing rather than an equity listing and covers:
- the listing process generally;
- timing requirements for the lodgement of listing applications;
- guidance on particular admission requirements;
- guidance on particular Corporations Act 2001 (Cth) requirements; and
- rights of appeal on admission decisions.
Guidance Note 34 Naming Conventions for Debt and Hybrid Securities - Guidance Note 34 assists listed entities that are proposing to issue ASX-quoted debt securities or hybrid securities to understand ASX’s requirements on how such securities should be described in relevant documentation and covers:
- when a security should be described as a “debt security”, “convertible debt” or “hybrid security”;
- which securities can be described as “bonds” or “notes” without any further descriptors;
- which securities can be described as “mortgage debentures” or “debentures” without any further descriptors;
- the additional descriptors required for other securities;
- where the required descriptions should appear; and
- the use of acronyms to describe securities.
ASX has also updated Guidance Note 30 on Applying for Quotation of Additional Securities to provide further guidance on the quotation of additional debt securities (by entities admitted as ASX listings and entities listed as ASX debt listings), as well as further guidance for entities admitted as ASX debt listings that subsequently wish to have equity securities quoted.