As we noted in our Equity Capital Markets Express on 8 December 2009, ASIC has released a consultation paper seeking feedback on proposals to facilitate issues of corporate bonds by Australian entities.
ASIC’s proposals focus on:
- allowing listed entities to use a simplified prospectus similar to a ‘transaction specific’ prospectus for ‘vanilla bonds'
- allowing listed entities to issue a ‘base prospectus’ which may be used for a number of offers and then a relatively short subsequent prospectus for particular bond offers, and
- allowing listed entities to issue convertible bonds to institutional investors using only a cleansing statement containing prospectus like disclosure rather than a prospectus.
We think that the release of the consultation paper is an encouraging sign in the development of an Australian quoted corporate bond market. ASIC has also recognised the potential benefit of facilitating the participation of Australian issuers in the global convertible bond market.
The initial feedback to ASIC’s proposal has been generally positive, albeit with a desire to seek to fine tune some of the conditions which may apply to the vanilla bonds disclosure requirements.