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COMMENT

Bond listings on Emerging Companies Market of Cyprus Stock Exchange

10 November, 2011 | Posted By: Shavasb Bohdjalian

The Cyprus Stock Exchange’s Emerging Companies Market (ECM) recorded a new milestone in its history following the debut of bonds on the Exchange in addition to the recent listing by Wargaming of 3.4 mln shares, which brought the number of companies having listed shares on the ECM to nine with combined market cap of EUR 500 mln. The new entrant was Greentea SA, which listed 1040 Unsecured and nonguaranteed bonds maturing 2018 in an issue worth EUR 104 mln.
The Cyprus Stock Exchange, a eurozone member exchange allows private or public companies domiciled in any jurisdiction in addition to Cyprus to issue bonds and list them on the ECM of the CSE in record time.
Such a listing of bonds is ideal for promoters who wish to raise money from other investors and are looking to operate through an approved regulatory structure considering that soliciting for money or raising money from third parties in the European Union can only be made by regulated entities or those operating under a regulatory environment as is the case for those who list their bonds on the ECM.
Promoters or companies that have lined up pension funds and other institutional investors wishing to invest in their project whose charter allows them to invest only in listed titles trading on recognized stock exchanges are also likely to use the ECM.
The ECM is very similar to what the AIM is for the London Stock Exchange with the added advantage that it’s a Multilateral Trading Facility (MTF) as defined by the EU’s Markets for Financial Instruments Directive (MiFID) and operated by an EU regulated stock exchange which the Cyprus Stock Exchange is.
With the eurozone debt crisis forcing banks to raise capital and refrain from lending, companies in need of financing are also likely to use a bond issue and list them on the CSE and in the process bypass the banks and offer a better return to investors directly and raise the required money.
The minimum amount of the bonds that can be listed on any eurozone stock exchange, including Cyprus is EUR 200.000 per listing with the Bond Registry maintained by the CSE in electronic format.
Once the bonds are listed, the CSE will provide the ISIN code allowing the bonds to be accessible by all professional investors using their Bloomberg or Reuters terminals.
Companies interested to list their bonds on the ECM need to maintain a CSE approved Nominated Advisor (Nomad) to handle the listing procedures. Eurivex is an approved and experienced Nomad.
Eurivex can also handle the documentation for buying and selling of the bonds to be transacted on the CSE, which means the promoter or the company can find the buyers and sellers for its bonds and then leave the paperwork to Eurivex to complete.
Eurivex offers complete package for bond listings including finding all the professionals to make your bond issue a success.
The role of the Nomad is critical to the listing process as it is for the Nomad to determine the company's suitability for an ECM admission. The Nomad is responsible for the company's compliance with the ECM Rules for Companies on and following admission. The ECM Rules are published by the Cyprus Stock Exchange and set out the rules and responsibilities that an ECM company must comply with.

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Shavasb@eurivex.com

(Shavasb Bohdjalian is an approved Investment Advisor and CEO of Eurivex Ltd., a Cyprus Investment Firm, authorized and regulated by CySEC, license #114/10 and approved by the Cyprus Stock Exchange to act as Nomad for listings on the Emerging Market. The views expressed above are personal and do not bind the company and are subject to change without notice)