How to issue bonds

The procedure for issuing bonds is fairly well formalized and includes several stages. First of all, it should be borne in mind that the issue of bonds is permitted no earlier than the third year of the company's existence, and the approval of the annual financial statements for two financial years is a prerequisite.

You will need

• - Civil Code of the Russian Federation;

• - Federal Law of April 22, 1996 No. 39-FZ "On the Securities Market";

• - Standards for the issue of securities and the registration of prospectus securities.

Instruction manual

1

Start by developing a concept for issuing bonds. The concept should take into account the general development strategy of the organization, the purpose of the issue, a detailed description of several options for the issue, as well as a plan for the withdrawal of bonds to the secondary securities market. Of no less importance is the search for a potential investor in the securities market.

2

After developing a general concept for the issue of bonds, make an informed decision on the issue of bonds or on a reasonable refusal to issue (if, for example, the analysis shows that there is no benefit from this procedure). The issue of the issue and placement of bonds falls within the competence of the board of directors (in a joint-stock company) or the competence of the general meeting of participants (in a limited liability company).

3

When making a positive decision on the issue of bonds, determine the quantity and par value of securities; procedure and maturity of bonds; placement method (private or public subscription); bond placement price and other conditions.

4

Define the circle of persons among whom it is planned to place bonds, if it is a closed subscription.

5

Determine the share of the bond issue, the impossibility of placing which will allow the issue to be considered invalid (such a share cannot be less than 75% of the issue).

6

Prepare a list of property with which bonds can be paid if payment is made not by cash but by other means.

7

Approve the decision to issue bonds. Approval is made no later than six months after the decision on the placement of bonds. The decision is approved by the board of directors or its replacement governing body. The document containing the decision on the issue must contain the date of signing and be sealed by the issuer.

8

Prepare a prospectus for securities. In case of placement by open subscription, its state registration is required. If a closed subscription for bonds is proposed among a circle of people whose number exceeds 500, registration of the prospectus is also required. As a rule, registration of a prospectus is carried out simultaneously with registration of a bond issue.

9

Submit documents for state registration of the bond issue. This should be done no later than three months from the date of approval of the decision on the issue or no later than one month if the prospectus is also approved. The registration authority makes a decision within a month from the receipt of the documents.

10

If you receive a positive decision on registration, proceed with the placement of bonds. The placement is carried out within the time periods specified in the registered decision on the issue of bonds. The placement period may not exceed one year from the date of registration.

eleven

At the end of the placement period, provide the registration authority with a report on the results of the issue. This takes a month from the end of the placement period. The report must be approved by the executive body of the company (in accordance with the charter), as well as the chief accountant of the issuing company.

Bond Issue: Issue Procedure