Fakty Komentarze Analiza (Facts Comments Analysis) l New rules of bond issue

Legal updates. A draft of the new regulation on bonds is currently being processed by the Council of Ministers.

Facts

The Council of Ministers is currently working on a new bill on bonds prepared by the Ministry of Finance. The changes to be implemented are quite considerable and therefore the lawmakers have decided not to amend the currently binding act but rather draft a new bill. 

The changes pertain to such matters as, for example, the rules on drafting terms of issue. Under the new regulations, it will be required that such terms be drafted and made available regardless of the form in which bonds are issued. This means that the terms of issue will also have to be prepared in the case of dematerialised bonds. 

Comments

The reason the new regulation is being prepared is because the currently binding act does not take into consideration the needs of the capital market. Because of the dynamic growth of the bond market, especially that of dematerialised bonds, the proposed changes are believed to be necessary.   

Analysis

The bill introduces several new solutions, such as the option to convene a meeting of bondholders under the terms of issue. The regulation also provides for new types of bonds, i.e. perpetual bonds and subordinated bonds.  

One of the most important changes is that it will now be possible to amend the terms of issue and also to convene a meeting of bondholders. In practice, a meeting of bondholders is very often convened under the terms of issue, which may be questionable. However, under the new regulation, an amendment of the terms of issue requires a resolution of the meeting of bondholders and the consent of the issuer. An amendment will also be possible as a result of univocal agreements concluded by the issuer with each bondholder.    

The full version of the bulletin can be found here.

Any questions may be addressed to:

Leszek Rydzewski, advocate, partner in the financial institutions and restructuring department

Dr Aleksandra Pokropek, attorney-at-law, senior associate in the financial institutions and restructuring department