Bonds origination

Bonds issue visible advantages, including comparably low costs of debt servicing, wide range of potential creditors, direct positive effect on the credit history of the borrower and others make then one of the most effective instruments of acquiring the funding.

Being a universal, full-service bank, Absolut Bank provides an opportunity of using the advantages of complex service, that can be implemented only in a large financial institution, but not in investment companies or medium and small banks.

Bonds – are equity securities containing the issuer’s commitment to repay their owners on the redemption date the nominal amount and to pay out periodically a certain amount as interest on the nominal amount. Bonds are issued by the government, local governments or by companies in the form of fixed or variable interest rate securities.

Issue of a bonded loan is an alternative to getting a loan at the short-term and medium-term debt market and it has a number of advantages for the issuer-company:

• Reduces the costs and increases the term of subsequent public borrowings ;
• Allows the borrower to manage the structure of the debt on his own ;
• Strengthens the public image of the bond issuer in financial market ;
• Reduces the credit costs ;
• Doesn’t depend on a specific creditor ;
• Provides an opportunity of attracting a wide range of investors ;
• Does not require a collateral ;
• Does not require tight costs targeting of the funds obtained ;
• Rules out the risk of bonds falsification and theft.

When organizing a bond issue Absolut Bank provides services of:

• Lead-manager (Develops the individual structure and optimal parameters of a bond issue depending on the specifics of the issuer’s business; prepares all the issuing documents, required for state registration of a bond issue, and develops information analytical materials for investors; provides support at the registration of issuing documents; provides consultations to issuers on matters of information mandatory disclosure in the process of bond issuance, coordinates the interaction of the bond issuer with the stock exchange and depositary; makes preliminary assessments of investors’ demand; prepares presentation materials and promotional meetings ;
• Underwriter (Searches for potential investors-buyers; creates a syndicate for the placement; provides guaranteed bonds placement on profitability terms, coordinated with the issuer, or on the “best efforts” terms);
• Payment agent (execution of coupon payments and of bond redemption);
• Offer-execution agent (Provides support to the issuer in executing the commitment of early redemption of bonds (collects notifications from bond owners on their intention to present the bonds for early redemption, calculates the total volume of bonds , presented for early redemption);
• Market maker (Organizes liquid circulation of bonds in the secondary market through support of bilateral quotes with fixed volume and spread);

Along with these services Absolut Bank, upon reaching the agreement with the issuer, is also ready to act as:

• Creditor in the case of providing bridge financing to the company ;
• Offer agent (short-term financing for the purpose of Offer execution; technical execution of the offer; re-placement of bonds, presented for early redemption).

Absolut Bank also provides bill isuue origination servises.

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