Exam Ready Notes for ELECTIVE Module 'BANKING & DEBT FINANCE LAW' (BDF)!
Notes for Workshop 7 of the BDF elective on the Legal Practice Course (LPC) at the University of Law.
These notes were used for the June 2023 exams, where I achieved a Distinction!
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Debt Securities (1)
Main parties involved in an issue of debt securities
PARTY Explanation of role
Issuer ® The borrowing entity – may be backed by a parent company guarantee
® the comp who’s borrowing
Guarantor ® Stands behind the issuer’s obligations – usually but not always the parent company (if there is
one)
Lead Manager/ ® Is appointed by issuer (mandate).
Joint Lead Managers ® Will underwrite the lion’s share of the issuer; runs the book; determines structure, timing,
pricing and syndicate strategy; organises road shows to market the issue
® responsible for instructing the lawyers who will prepare the docs
Co-managers ® Syndicate members who sell the issue to investors by ‘making a book’ (finding investors who
want to buy);
® Will (usually) underwrite the remainder of the issue not underwritten by the lead manager
® Will be a group of financial institutions usually selected jointly by the issuer and lead manager
prior to the launch date
Principal Paying ® Co-ordinates payments of interest and capital to bondholders
Agent or Paying
Agent
Fiscal Agent ® If no trustee, carries out the role of a principal paying agent, issues the bonds and convenes
meetings of bondholders at the request of the issuer only; no duty of care to bondholders
Trustee ® if no fiscal agent, then trustee
® Acts as intermediary between bondholders and issuer.
® Owes duty of care to bondholders
Listing Agent ® Advises issuer on and handles all listing aspects
Solicitors ® Lawyers acting for the lead manager and lawyers acting for the issuer – Separately
represented
Auditors ® Agree use of their report on the accounts in the prospectus.
® Confirm no recent changes to the financial position.
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