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Primary
Markets
Cash Equities
Derivatives
Fixed Income
IDEM
RNS
MOT
X2M Technology
Monte Titoli CC&G
ORB ExtraMOT
London Stock Exchange Derivatives IDEX
GlobeSettle
SEDOL Unavista Real Time Data
Information
Services
Post Trade
Listing and
Trading
Business
Services Academy Events &Studios
OFIS
Hosting and Connectivity
LSEG is a leading international open access financial market infrastructure group
LSE plc sits within LSEG as the UK Recognised Investment Exchange business.
LSE Group – Depth and Breadth
2
Equities
2,300 Listed companies
with aggregate
market value of $7
trillion
500+ International
companies with a
combined market
value of $3.7
trillion
$914bn Raised in last 10
years from 2005
– 2015
Debt
13,400+ Debt securities listed
on LSE Main Market.
Overall money raised
exceeds $3.45 trillion
210+ International
sovereign bonds
from 28 different
countries in 8
different currencies
$338bn+ Raised by sovereign,
regional and local
governments
£256bn Total on-exchange
turnover in 2015
ETFs
1,300 ETFs and ETPs
listed in London
from 24 issuers
43% Market share of
European ETF
trading
10 RQFII ETFs listed
on LSE since 2014
giving investors
exposure to Chinese
A-shares directly.
300% Growth in
European ETF
trading volumes
in the past 5
years
Heart of the World’s Capital Markets
3
11 IPOs raising over
$1bn in London in
the last 3 years.
Global Financial Centres Index 20
Source : Factset, GFCI 20
Broad Capabilities Across Many Debt Markets and Currencies
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
% o
f ET
F tr
adin
g
Green
Bonds
Islamic
Finance
Dim Sum
Bonds
High Yield
Convertible
and
Structured
Debt ORB
Masala
Bonds
EuroUS DollarBritish PoundSwedish KronaAustralian DollarNorwegian KroneChina RenminbiJapanese YenHong Kong DollarCanadian DollarMexican PesoOther
‘Other’ includes 32 different international
currencies across 225 bonds, raising a
combined £25.2bn
More International Equity Listings Than Any Other Exchange Close to 50% trading of ETF in Europe is done in London
LSE
DB
ENXT
B.Italiana
SIX
The London Proposition – Snapshot
795 794
752 748 734
720 719 718 716 713
Top 10 Financial Centres by GFCI 20 rating
5
485 459 375 162 88 52
1444 1620
2247
617 848
1949
0
500
1,000
1,500
2,000
2,500
3,000
LONDON NYSE NASDAQ SINGAPORE TORONTO HONG KONG
International Domestic
Why consider a Listing on the LSE
Benefits of Listing in London
6
• The UKLA has a worldwide
reputation as a fair, effective and
efficient regulator.
• By complying with its well respected
standards of regulation and
supervision, an international company
can enhance its standing within the
global investment community.
• The listing and admission fees for
Eurobonds are competitive and easy
to calculate.
• London is the only major listing
venue not charging bond issuers an
annual fee – particularly
advantageous for long maturity
instruments.
The prestige
of a globally
respected
exchange
Competitive
costs – no
annual fee
Tapping into
a new
investor pool
Home to the
common
language of
Eurobonds
• English is the common language for
virtually all Eurobond documentation.
• By listing in London, issuers can avoid
any misunderstandings and delays,
which might arise when Eurobonds
are listed on an exchange where the
first language is not English.
Enhanced
company
profile and
visibility
• Listing in London provides the
opportunity for significant profile
raising, including via market open
ceremonies that draw international
media attention and political support.
• By having its debt securities traded on
a highly visible and liquid market such
as London, an international company
can make its name, products and
services more familiar to investors
worldwide.
Efficient
electronic
bond trading
• MTS, an LSEG group company, provides
the wholesale electronic trading system
for government bonds and has extensive
experience in running some of the largest
government bond markets globally.
• MTS Cash serves the Government debt
securities markets of 18 countries across
Europe, supports transparent price
discovery and provides a mutually
contributed pool of interdealer liquidity.
Professional,
consistent,
efficient and
fast
• The UKLA and LSE are aware of the
challenging time frames under which
issuers and their advisers have to
operate in the Eurobond market.
• The UKLA has a specialist Debt team
with primary responsibility of reviewing
bond documentation. This ensures a
smooth and efficient vetting process with
strict turnaround timings.
Active
primary and
secondary
market
trading
• London is the leading centre for trading of international eurobonds.
• London-based firms account for 60% of the primary market and 70% of the secondary market activity.
• London is a gateway not only to
Europe, Middle East and Africa but
also to the US, Asia and beyond.
• A London listing guarantees
maximum investor diversification.
• UK assets under management totalled a record £6.8
trillion in 2014, the second largest in the world. The
UK is also the leading European centre for
management of hedge funds, sovereign wealth funds
and private equity funds.
• The UK accounts for 37% of global foreign exchange
trading. More US dollars are traded in the UK than in
the US.
• The UK is the leading derivative centre worldwide,
accounting for 39% of trading in OTC interest-rate
derivatives
• The UK has the leading share of trading in many
international financial markets such as cross border
bank lending (16%), international insurance premium
income (29%) and foreign exchange trading (37%).
Equity AUM held in International Portfolios, by Metro Area (Q4 2015)*
Key Facts:
• London, more than any other financial centre, offers a
long-standing globally oriented investor base
• UK investors have diversified portfolios and are used
to supporting companies’ international development
• Institutional investors in the other major listing venues
tend to be more domestically focused
• Global investment portfolios ensure that investors
appropriately value businesses with a global profile
and aspirations
The Largest Investor Pool in the World $2 trillion invested in international equity out of London
7
1,987
1,002
575
375 304 287 275 263 251
194 188 89
London New York Oslo Toronto Paris Zurich Frankfurt Tokyo Amersterdam Stockholm HongKong Sydney
Source: Facset and LSE calculation, 2016
*international portfolios defined as investment in companies with a domicile different to the country of domicile of the portfolio manager
Source: Factset and London Stock Exchange calculation, January 2016
Domestic = North America for NYSE, NASDAQ
ROW = rest of world
Domestic = UK for LSE
- London has more international assets under management than any other global financial centre.
- Companies listing in London are able to access overseas investors through widely used and well understood capital raising routes.
Domicile of Investors in LSE-Listed Securities by Region
5% Rest of World
30% North America
13% Europe
Domicile of Investors in Selected Exchange’s Listed Securities
52% UK
A Truly Global Investor Base Global investors buy London-listed securities
$1.8 trillion held in
LSE-listed
Securities
Dom
estic
Dom
estic
Dom
estic
RO
W
RO
W
RO
W
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
LSE NYSE NASDAQ
Domestic ROW
8
Asia Pacific • State Administration of Foreign
Exchange (China)
• GIC
• BNY Mellon Hong Kong
• Blackrock Japan
• Mitsubishi UFJ Trust
• Sumitomo Mitsui
• Aberdeen Asset Management
Asia
• Hang Seng Investment
Europe • Blackrock
• Legal & General
• Scottish Widows
• Invesco
• M&G
• Standard Life
• AXA
• Societe Generale
• Alecta Pension
• DWS Investment
• Swedbank Robur
• Allianz Global Investors
• BNP Paribas
• Union Investment
Privatfonds GMBH
• Norges Bank
Americas • Capital Research
• Vanguard
• SSgA Funds
• Fidelity
• Blackrock
• Thornburg Investment
• Artisan Partners
• Alliance Bernstein
• T. Rowe Price
• Caisse de dépôt et
placement du Québec
• Itau Unibanco Brazil
Africa and Middle East
• QIA
• P.I.C South Africa
• Kuwait Investment Authority
• Investec
• CCB Islamic Bank
• Abu Dhabi Investment Authority
-11
-10
-9
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
10
11
London trading hours
Selected Major Institutional Investors in London Listed Bonds
GMT
Source: Factset
*LSEG, as of September 2015
• Listing in a global market such as London raises a company’s international
profile.
• High international regulatory standards ensure access to a globally oriented
investor base
• LSE is home to the deepest global foreign exchange centre.
• LSE markets are supported by a network of 350 member firms from over 20
countries*,
Raise Your International Profile London – Global Hub for Investors
9
• London Stock Exchange’s Capital
Markets Days facilitate face-to-face,
scheduled dialogue between
companies and institutional
investors. This is usually done to
highlight a specific region or sector
focus.
• Our central position within the
London financial markets offers an
unbiased arena in which to bring
together select groups of
companies with the most extensive
possible network of appropriate
potential investors.
Format
Market Opening: Unique opportunity for all companies, dignitaries and sponsors are invited to
open London’s market at 08:00 on the day of the event. This is filmed and can be accessed by
international TV stations broadcasted in their relevant regions. A photographer is also present.
Presentations: Welcome by a senior executive of the London Stock Exchange, giving an
overview of the market/sector. Summary of the IPO process by top City advisors and investors.
Each company will have an opportunity to explain its investment story.
1-2-1 meetings: Highly targeted individual meetings pre arranged by the Exchange. Each
company has its own private meeting room the entire day which is fully equipped with all AV
capabilities.
Maximising exposure: Through the Exchange’s press team from organisations such as the
BBC, The Wall Street Journal, the Financial Times, CNBC & Sky News.
London Stock Exchange Capital Markets Days
10
As a result of the recent EU Referendum and subsequent Brexit vote, uncertainty about London’s status as a financial centre
has arisen. The international community has responded and shown their commitment to London via a number of high profile
transaction announcements, thus proving London is open and ready for business
India’s HDFC Lists the First
Masala Bond in London
Japan’s SoftBank Announces £24bn
Takeover of UK’s ARM Holdings
GlaxoSmithKline invests £275m for
Three New UK Manufacturing Sites
• On 21st July, Housing Development Finance Corporation (HDFC) issued the world’s first Masala bond issued by an Indian corporate
• The issue was 4.3 times oversubscribed and paves the way for the opening of the Masala bond market globally to support Indian company and infrastructure financing
• Distribution: 86% taken by Asian investors and 14% by European investors; Institutional investors made up 82% and private banks 18%
• “This is a milestone transaction for HDFC. We have achieved our objective of attracting a global pool of capital to diversify our borrowing profile, The positive investor response towards this issuance reinforces the blue-chip positioning of HDFC, and establishes a significant benchmark for Indian companies” said HDFC chairman Deepak Parekh.
• UK technology firm ARM Holdings is to be bought by Japan's Softbank for £24bn
• ARM Holdings designs microchips used in most
smartphones, including Apple and Samsung models, and employs more than 3,000 people
• Softbank has previously acquired Vodafone's Japanese operations and the US telecoms company Sprint. The $20bn deal was the biggest foreign acquisition by a Japanese firm at the time
• The new deal will be funded by Softbank's own cash
reserves and a long term loan from Japan's Mizuho Bank
• Masayoshi Son, chairman and chief executive of Softbank, said: "This is one of the most important acquisitions we have ever made, and I expect ARM to be a key pillar of SoftBank's growth strategy going forward
• Despite arguing against Brexit before the referendum, GSK believes the UK remains an attractive place for making medicines – London currently accounts for nearly 50% of GSK’s worldwide R&D and a third of it’s manufacturing.
• The company recently announced plans to invest a further £275m into three drug manufacturing sites in Britain, signalling its confidence in the country despite last month's vote to leave the European Union
• "It is testament to our skilled UK workforce and the country’s leading position in life sciences that we are making these investments in advanced manufacturing here," said Chief Executive Andrew Witty
• Business minister Greg Clark said GSK's move was a clear vote of confidence in Britain and demonstrated that "there really is no place better in Europe to grow a business"
After Referendum Business As Usual International Deals Continue
11
…via 13,400+ Listed debt instruments
… raising over £3.45 trillion
…from 65 countries
…in 37 currencies
1217 Issuers..
3%
97%
Issuance
70%
30%
Trading
13%
87%
Amount Outstanding
UK
Rest of World
2011
The London Stock Exchange is
the global financing hub for fixed
income issuers
Source: TheCityUK estimates (2011)
World Federation of Exchanges (2011)
Bond Primary and Secondary Market Statistics by Region
70% Of global
secondary market
bond trading
takes place in
London
Global Home for Raising Fixed Income Capital
13
Centre of Global Fixed Income Trading
5,500 7,000
13,000
22,000
32,500
2001 2002 2005 2008 2011 2015
Bonds Value Traded on Exchanges (USDm)
+18% CAGR
(2001-2011)
*
Source: Bank for International Settlements; TheCityUK estimates (2011)
World Federation of Exchanges (2011)
* 2015 value estimated based on previous trend growth
LSEG has developed
highly liquid and
transparent electronic
fixed income order books
that allow for both
primary and secondary
access and trading to
international investors
With changes to
regulation including
MiFID II and the
associated pre- and post-
trade transparency
requirements, we
anticipate that demand
for credible secondary
market platform trading
for bonds will increase
14
Apart from standard issuance we are leading the way in new fixed income products
Green
Bonds
• Retail and wholesale markets, offering the choice of trade reporting, end-of-day pricing and continuous quoting
• Unique and comprehensive specialist offering for green bonds
• Dedicated green segments
• Industry Affiliations:
• ICMA GBP Observer, Social Stock Exchange, Climate Bonds Initiative, City of London Green Finance Initiative
Islamic
Finance
• LSE is a key global venue for the issuance of Sukuk
• There are over 20 banks in London providing Islamic financial services, more than any other European country
• Unique and comprehensive specialist offering for sukuk
• Dedicated sukuk fixed income segments
Dim Sum
Bonds
High Yield
• LSE’s PSM accommodates all types of debt
securities including high yield bonds in any
denomination under a wholesale regime
• The PSM is a global listing venue attracting
investment from many other locations in
Europe, Asia, Latin America and Australia
Convertible
and
Structured
Debt
• LSE’s PSM accommodates all types of debt
securities including convertible bonds in
any denomination under a wholesale regime
• Many investors can only buy debt
instruments listed on a Recognised
Investment Exchange. LSE is well
positioned to provide efficient and well-
regulated markets for both bond issuers
and investors
ORB
• LSE’s flagship retail
market - both primary
issuance and secondary
trading of retail
denominated bonds
• Retail bonds can also
be held in an ISA, which
is a tax-free savings
account
Masala
Bonds
• LSE is a key global venue for the issuance of Masala bonds
• Listing venue for the world’s first Masala
bond from an Indian corporate
• Unique and comprehensive dedicated offering for Masala bonds
• LSE is a key global venue for the issuance of Dim Sum bonds
• Unique and comprehensive dedicated offering for Dim Sum bonds
Cutting Edge Financial Products
15
Main Market Professional Securities Market
Applicable UK
Listing Rules • Chapters 2 and 17 of UK Listing Rules • Chapter 4 of UK Listing Rules
Financial Records
• At least two years trading records and independently
audited accounts consistent with the International
Financial Reporting Standards (IFRS)
• Local GAAP can be used
Listing Documents • Full prospectus • No full prospectus required
• Listing Particulars adequate
Transferability • The debt securities subject to the listing must be freely transferable
Issue Size • The market capitalisation of the class of the debt securities to be listed must be at least £200,000
Listing of the Whole
Debt Class • All debt securities of the same class should be listed
Designation • Wholesale & Retail Bonds • Wholesale Bonds only, although retail denominated
bonds can be issued under the wholesale regime
A Choice of Debt Markets
16
Smooth Listing Process
UK debt markets’ high standards ensure credibility amongst the global investor base. The
UK Listings Authority (UKLA) has a reputation for its a robust and balanced approach to
implementing the listing rules whilst maintaining efficiency of the listing process.
• Listing process is a two pronged approach between
LSE and UKLA
• UKLA committed to efficient turn around times:
• Up to 4 clear working days after first
submission
• 2 clear working days** for subsequent
submissions
• UKLA checklist can be used by issuers prior to
submission
• One-off £2,000 UKLA Vetting fee is applied (no extra
annual or application fees)
N.B. This process applies to plain vanilla debt securities, redemption-linked securities, medium term note programmes, securitised derivatives and supplementary prospectuses/listing particulars for non-equity securities.
MTNs only require approval for the base prospectus with subsequent draw-down issues allowed at any time during 12 month period, subject to publication of Final Terms and Prospectus Supplement by 2pm the day before issuance
**Only if required due to additional comments from he UKLA
Typical transaction timeline
Total transaction takes between three to eight weeks
Up to one week Four working days Two days**
UKLA Documentation
Approved and
Listing Granted
Listing
Effective
Listing
Application
LSE
London
Listing
Application for Admission
to Trading
Admission
Granted Trading can
Begin
Bond priced
Initial review
completed
18
Passporting a Prospectus
Easy process to dual list in London via passporting (when the bond prospectus is already approved in another EEA jurisdiction)
For existing notes to be admitted to trading on the regulated market of the London
Stock Exchange, the issuer would have to undertake the following steps
Action Comment
Step 1
Obtain a passport from the existing
EEA Competent Authority by
submitting a Notification Request
Form.
The existing EEA Competent Authority
has three working days to notify the
UKLA that it has approved the base
prospectus. Once this has occurred, the
issuer can contact the UKLA to apply
for the notes to be listed in the UK.
Step 2
Submit the security to the UKLA
Official List alongside the passport
and make some small additions to
the document, for example confirm
the planned listing on London Stock
Exchange in the prospectus.
Step 3
Apply to the London Stock
Exchange for admission to trading.
This involves submitting a
completed Form 11 and an
electronic copy of the relevant
prospectus.
1Form 1: http://www.londonstockexchange.com/companies-and-advisors/main-market/documents/publications.htm 2UKLA Checklist: https://www.fca.org.uk/markets/ukla/forms#listing-applications
For new notes to be issued under the existing programme to be admitted to trading
on the regulated market of the London Stock Exchange, the issuer would have to
undertake the following steps:
Action Comment
Step 1
Send a notification request form in
relation to the base prospectus to
the existing EEA Competent
Authority, who will inform the UKLA
If this has already been done for
previous admission, there is no need to
do it a second time.
Step 2
Send an application for admission
of securities form and a listing rules
checklist to the UKLA2.
Note that the application for admission
of securities form has to be sent for
each new series of notes, the listing
rules checklist only needs to be sent the
first time an issuer is applying to the
official list of the UKLA.
Step 3
Apply to the London Stock
Exchange for admission to trading.
This involves submitting a
completed Form 11 and an
electronic copy of the relevant
prospectus.
Ensure that the relevant final term
specifies, that the notes will be admitted
to trading in London. That is the only
drafting difference.
• Passporting involves a prospectus approved by the issuer's Home Competent authority in the EEA being accepted by another EEA member state as the basis of a
public offer or admission of securities to a regulated market.
• In this way, issuers with bonds listed elsewhere can gain a London listing quickly and efficiently.
19
Admission Process
For admission, the documents that we need are1:
• Signed Form 1 with EU sanctions complete
• Signed Board Minutes
• Prospectus
• UKLA approved letter
• Confirmation of the note being issued (usually the day before)
Also as soon as possible in the admission process, it is necessary to
arrange for the creation of the relevant trading codes:
ISIN/SEDOL
ISINs are normally allocated by the country of domicile of the issuer. London Stock
Exchange is then responsible for allocating a SEDOL code, which is a unique instrument
identifier.
Email the Pricing Supplement(s) to [email protected] and allow 48 hours for these
to be assigned.
TIDM
A Tradable Instrument Display Mnemonic (TIDM) is the three or four character identifier
specific to London Stock Exchange. Issuers may request a specific TIDM, which will be
issued, provided it is not already in use or reserved. Once reserved, these are held for a
period of six months.
Requests should be made to the Admissions Team by emailing the issuer name and the
instrument name, making it clear that it is a TIDM request, to [email protected]
1Note that these documents can initially be in draft form (i.e Form 1 not signed and prospectus not yet approved – but it will need to be a workable document (i.e have most of the key
information included)). All final documentation needs to be with LSE Admissions by 4pm the day before admission. 20
International Cost Competitiveness
Competitive Fee Structure:
• LSE fees are calculated on a sliding scale, based on issue size and type of issue.
• No fee is payable for setting up an MTN program.
• No annual fee is payable in respect of debt securities on the London Stock Exchange’s markets
Face Value (£m) Fee (£)
Greater than
or equal to
Less than
0 50 2,500
50 100 4,000
100 and above 4,200
Face Value (£m) Fee (£)
Greater than
or equal to
Less than
0 25 300
25 50 1,750
50 100 2,700
100 500 3,600
500 above 3,650
Eurobonds & International Issuers Issuers under debt issuance programs
21
“Today, we have outlined a bold and ambitious vision for
our strategic partnership, and the decisions we have
taken today reflect our firm commitment to pursue it and
the confidence to achieve it. Indeed, the outcomes today
have shown that we have already taken our relationship
to a new level.”
Narendra Modi
“It’s a real opportunity to open a new chapter in the
relationship between our two countries.”
David Cameron
“We will also increasingly raise funds in
London’s financial market. I am pleased
that we will issue a railways rupee bond
in London stock market. This is – for
this is where the journey of Indian
Railways had begun.”
Narendra Modi
“We will work together with the British
Government, industry, and the financial market
to deepen our relationship and harness that
interest in India’s infrastructure. Very soon,
these bonds will become strong instruments for
engagement between our financial markets.”
Narendra Modi
Source: Joint press release UK-India Summit, 12 November 2015, https://www.gov.uk/
“रूपी ब ॉंड अपने आप में भारत की आर्थिक
सॉंपन्नता का एक महत्वपरू्ि ममश्रर् है और
हहॉंदसु्तान के हर नागररक को इसको गौरव के रूप
में देखना चाहहए और इसको उजागर करना चाहहए, तभी तो भारत की ताक़त बढ़ती है“
Narendra Modi
India – UK Finance Partnership
23
“Strengthening the economic and financial links between India and
the UK is a key priority for the government, and a stable and
competitive financial services industry in the UK is an important
asset to the UK and to the rest of the world.”
Priti Patel, Exchequer Secretary to HM Treasury and the Prime
Minister’s Indian Diaspora Champion
“London Stock Exchange is one of the premier hubs
globally for any financial activity”
Arun Jaitley, Honourable Minister of Finance
London Stock Exchange has more Indian
companies listed on our equity and debt markets
than any other international market and provides
cutting edge technology to some of India’s
leading exchanges. India’s most dynamic
companies have access to the world’s largest
pool of institutional investment capital here in
London.”
Xavier Rolet, CEO, LSEG
Roundtable with Railways Minister, 30 October 2015 13 March 2015, international investors roundtable, LSE
18 Nov 2014, IFC Market Open
London Stock Exchange
LSEG at the heart of India-UK EFD
24
“Our clear aspiration is for the City of London to become India’s
international destination of choice to raise funds, particularly to
finance India’s ambitious infrastructure plans. Our mantra is: Make in
India, Finance in the UK”!
Alok Sharma, Minister for Asia and the Pacific, speaking at the
Global Investor, India October 2016
2007 2014 2015 2016
London Stock Exchange is the global hub for Masala Bond issuance.
Masala Bonds Key Milestones
September 2016 World’s First Masala
bond by a foreign
government entity
July 2016 World’s First Masala
bond by an Indian
corporate
November 2014 IFC commits $1.4 billion
investment in India and
issues the First Masala
bond listed in London to
support Axis Bank
domestic infrastructure
bond
August 2016 World’s First Green
Masala bond by an
Indian quasi-sovereign
issuer
November 2015 Reserve Bank
of India revises the
External Commercial
Borrowing framework
allowing the issuance of
INR denominated bonds
August 2015 World’s First Green
Masala bond invested
back-to-back in Yes
Bank’s domestic Green
INR bond
25
April 2007 First INR-linked bond listed
in London
March 2016 World’s Longest Dated
15-year Masala bond
April 2015 IFC issues Rs 16 billion,
the largest ever Rupee
denominated bond
issued outside India
June 2016 LSE hosts the inaugural
Green Infrastructure
Investment Coalition India
Forum
Hosted by the London stock Exchange, the inaugural India Forum of the Green Infrastructure Investment Coalition (GIIC)
brought together European institutional investors, Indian green infrastructure developers and financiers, development banks
and perspectives from both governments.
The aim of the event was to allow investors to understand the various ways of gaining exposure
to this quickly growing asset class.
The Forum covered India’s goals, policy measures being implemented, and investment
opportunities becoming available.
We invited participants to present 5 year pipelines of green investment opportunities, including
bonds and equity, with ticket sizes of $100 million and over.
India has huge green infrastructure plans: a target of 175 GW of renewables by 2022, a ramp-
up of rail transport, energy efficiency projects and development of 100 “smart cities”.
Speakers included:
• Sir Roger Gifford, Head of London’s Climate Finance Initiative
• Dr Rathin Roy, Director NIPFP
• Alok Sharma, MP UK Government Infrastructure Envoy
• Pierre Ducret, Special Advisor on Climate Change COP22
• Ajungla Jamir, First Secretary at India High Commissioner
• Sean Kidney, CEO Climate Bonds
• Abhay L. Bongirwar, Executive Director IDBI
26
June 2016 India Forum
April 2016 Visit of Minister Piyush Goyal
“Minister of Power and Coal Piyush Goyal, who is on a two-day visit to the UK, visited the London Stock Exchange. During the visit,
Goyal met officials from Natgrid and UK Power Network and explained about his plans and vision to increase the power generation
in India and renewable energy scale up plan has been drawn up to 2022. According to sources, Goyal emphasised the need for the
developed world to show its commitment towards climate change by putting money in climate finance.”
Business Standard, 21 April 2016
“In an attempt to raise resources for India’s ambitious green energy programme, state-run firms, such as NTPC Ltd, Neyveli Lignite
Corp. Ltd, Power Finance Corp. Ltd (PFC), Rural Electrification Corp. Ltd (REC) and PTC India Ltd, plan to issue masala bonds to
raise $1 billion, according to a government statement released on Wednesday.”
VCCIRCLE, 20 April 2016
27
London Stock Exchange is now the largest Masala bond centre globally. Ever since the first Masala bond listing in London in 2007, we are
firmly committed to developing long-term strategic partnerships with issuers to ensure the success of this financing stream and help Masala
bonds evolve from specialist to a mainstream asset class.
“IFC issued the bonds in
London to leverage the
city’s standing as a
premier financial centre.
The vast majority of
investors are European
insurance companies.” ,
Nov 2014, IFC press
release for INR 10bn,
10year 6.3% bond
“Addressing climate change
is a priority for IFC in India.
IFC’s green Masala bond
demonstrates the powerful role
of capital markets in mobilizing
savings for climate finance—
and a listing in London
allows us to attract the
widest possible range of
international
investors“ August 2015, IFC
press release for INR 3.15bn
Green Masala Bonds
13 August 2015, IFC & Yes Bank Market Open, LSE
London Stock Exchange’s Global Reach
In July 2016, London Stock Exchange
welcomed the world’s first Masala
bond issued by an Indian corporate.
The landmark INR30bn 37 month bond
with a yield of 8.33% from Housing
Development Finance Corp (HDFC),
was 4.3 times oversubscribed and
paves the way for the opening of the
Masala bond market globally to
support Indian company and
infrastructure financing
"London Stock Exchange
continues to distinguish itself
by offering a wide range of
financial instruments and
enjoys unshakable trust from
international investors.”
Chairman Deepak Parekh,
HDFC press release for
INR30bn 37month 8.33% bond
28
Bharti Airtel Zyfin & Sun Global Yes Bank SBI-LSEG IRFC
Description Issuance of maiden sterling
bond in London
Listing the world’s first India
fixed income ETF on London
Stock Exchange
MoU to foster joint
collaborations on bond and
equity issuance in London,
with a strong focus on Green
Infrastructure Finance
FTSE Russell and State Bank
of India partner to create
Indian Bond Index Series.
Issuance of offshore Rupee
denominated bonds in
London
Size £500m -- Up to $550m Green bonds
$1bn equity -- --
Announcement
“The bond issue will help Bharti
extend maturities and diversify
investor base on its debt
portfolio”
“LSE is the broadest ETF
market in Europe. This ETF will
give international investors
access to the Indian fixed
income market, which is worth
USD 1.3 trillion and is a vital
source of finance for the
infrastructure sector”
“Both financial institutions will
leverage their complementary
strengths to facilitate access to
capital raising in London and
India for Indian entities and will
work jointly on the development
of a wide range of new
products. Through this
collaboration both parties also
demonstrate their commitment
to the promotion of products
and platforms supporting the
use of Green Finance”
“State Bank of India (SBI),
India’s largest Commercial
bank, has teamed up with FTSE
Russell to launch the FTSE
TMX SBI India Bond Index. This
index addresses the long felt
interest of investors to have a
credible benchmark for Indian
debt.”
“We are set to launch a railway
bond in London. It is
appropriate as the journey of
Indian Railways started in he
UK”
LSEG’s India Partnerships
29
The Current Status of the Masala Bond
Market: London Stock Exchange listings
Source: Bloomberg and LSEG. Averages are arithmetic means of one or more coupons. This does not constitute investment advice. Includes supranationals
…raising
$2.19bn in total
…from 6 issuers…
33 Masala bonds
listed historically
14 Masala bonds
Currently listed…
Maturities Maturities showing issuance
volumes across tenors
Trading A range of secondary trading
markets available
Coupons Financing possible at attractive
issuance yields
Order book trading
Continuous market making
End-of-day pricing
Trade reporting
6.59%
6.76% 6.91%
Average 3yr 5yr
Average Coupon (active Masala bonds)
30
6 New Masala bonds
listed in 2016 YTD
6%
63%
17%
14%
Issuance by Maturity (%)
<3 yrs
3-5 yrs
5-10 yrs
10 yrs+
British Columbia NTPC HDFC Axis Bank EBRD IFC
Transaction
Details
Issue Date 09 September 2016 10 August 2016 21 July 2016 01 June 2016 4 March 2016
21 March 2016 /
10 Aug 2015 /
18 Nov 2014
Issue Size INR 5 bn INR 20 bn INR 30 bn USD500mn INR 5bn
INR 2bn / INR
3.15bn / INR
10bn
Coupon 6.6% 7.375% 7.875% 2.875% 6.4% 7.1% / 6.45% /
6.3%
Maturity 40 months 5 year 37 months 5 year 3 year 15 year / 5 year
/ 10 year
Issuer
Profile Rating AAA / Aaa BBB-(emr)* AAA/A1+** Baa3 / BBB- AAA / Aaa AAA / Aaa
Recent Masala Issuance
*Fitch emerging markets bond rating **CRISIL and ICRA ratings
32
Company Details
Company NTPC Ltd
Rating BBB-(emr)*
Sector Utilities
Market PSM
Transaction Details
Issue Date 10 Aug 2016
Issue Size INR 20 billion
Yield at issue 7.48%
Coupon 7.375%
Maturity 5 years
Company profile
NTPC is India’s largest power utility company. The
company’s headquarters are in New Delhi and its
core business involves generating and selling
electricity to state-owned power distribution
companies and State Electricity Boards in India.
It was founded by Government of India in 1975
and in May 2010 was conferred Maharatna status.
NTPC established a Green Bond Framework
which has been independently certified by Climate
Bonds Initiative, a partner of London Stock
Exchange and adheres to the ICMA Green Bond
Principles.
Post issuance, KPMG will provide assurance that
the nominated projects are in alignment with the
company’s Green Bond Framework.
Debt issuance story
The proceeds of the bond will be invested to
support wind and solar projects complementing
India’s government ambition to generate 175GW
of renewable energy by 2022.
The deal was oversubscribed, with books in
excess of INR 29 bn from more than 60 accounts.
The green certification gave NTPC a global boost
and, as a result, better pricing. Notable was
NTPC's investor diversification internationally and
the company’s ability to attract participation by
dedicated green bond funds from Germany and
Denmark into the deal.
Joint Leads: Axis Bank Ltd, Hong Kong &
Shanghai Banking Corporation, Standard
Chartered Hong Kong, Mitsubishi UFJ Financial.
Geographical Distribution
Asia 70%
Europe 30%
Distribution by Investor
Banks 15%
Fund
managers/insurers/
sovereign wealth funds
80%
Private Banks 5%
*Fitch emerging markets bond rating
NTPC lists world’s first green Masala bond by an Indian issuer on
London Stock Exchange
"The investor reach gets enhanced. The green investors in
Europe and the US have invested in this issue in addition to
the normal investor"
Shashikant Rathi, Head of Treasury and Debt Capital Markets,
Axis Bank (Joint Lead)
"From an issuer perspective, it made more sense to do a
Green Masala instead of just a Masala because there is
additional liquidity provided by dedicated green investors
and they can get pricing traction from the additional
demand,"
Jujhar Singh, Co-head of HY, Standard Chartered (Joint Lead)
"We are keen to tap a new and international investor base
for our renewable energy programme and access offshore
financing without the associated exchange risks, which we
can achieve through this issuance on London Stock
Exchange.
We are also grateful to London stock Exchange for guiding
us through the process of Listing and attracting
international investors into the first ever Green Masala bond
offering from India"
Kulamani Biswal, Director (Finance), NTPC
33
Company Details
Company
Housing
Development Finance
Corporation (HDFC)
Rating AAA/A1+*
Sector Financials
Market Main Market
Transaction Details
Issue Date 21 Jul 2016
Issue Size INR 30 billion
Coupon 7.875%
Yield at issue 8.33%
Maturity 37 months
Company profile
HDFC is a leading provider of Housing
Finance in India.
The company also has a presence in
banking, life and general insurance, asset
management, venture capital and education
loans.
Founded in 1977 as the first specialised
mortgage company in India.
HDFC’s distribution network spans 396
outlets which cater to approximately 2,400
towns and cities spread across India.
Debt issuance story
Represents the world’s first Masala bond
issued by an Indian corporate.
The issue was 4.3 times oversubscribed
reflecting strong investor sentiment and paves
the way for the opening of the Masala bond
market globally to support Indian company
and infrastructure financing.
The final order book was INR 86.73 billion
from 48 accounts with final allocations being
well-diversified.
Joint Leads: Axis Bank Ltd, Credit Suisse and
Nomura.
HDFC is first ever Indian corporate to list Masala bond, chooses
London Stock Exchange for landmark issuance
“London Stock Exchange continues to
distinguish itself by offering a wide range of
financial instruments and enjoys unshakable
trust from international investors.
This is a milestone transaction for HDFC. We
have achieved our objective of attracting a
global pool of capital to diversify our borrowing
profile. The positive investor response towards
this issuance reinforces the blue-chip
positioning of HDFC, and establishes a
significant benchmark for Indian companies”
Deepak Parekh, Chairman, HDFC
*S&P, Moody and Fitch ratings unavailable, ratings shown provided by CRISIL and ICRA
Geographical Distribution
Asia 86%
Europe 14%
Distribution by Investor
Asset Managers 81%
Private Banks 18%
Banks 1%
34
Issuer Details
Company Province of British Columbia
Rating AAA / Aaa
Sector Government
Market Main Market
Transaction Details
Issue Date 09 Sep 2016
Issue Size INR 5 billion
Coupon 6.6%
Maturity 40 months
Issuer profile
The Canadian Province of British Columbia
becomes the first foreign government entity to issue
a Masala bond, choosing London for its listing.
With this issue, the Province continues its
reputation as an innovator and leader amongst its
AAA-rated peers in diversifying sources of funding.
“The Masala bond issuance offers British Columbia
a means to become well-positioned to profile our
confidence in the outlook for India, and to
participate in the internationalization of the Rupee
and India’s economy.” , British Columbia Minister of
Finance Michael de Jong.
Debt issuance story
The British Columbia bond raised INR 5 billion
(c. $75 million) with 6.62% semi-annual yield,
securing high quality investor support from
across Europe, Asia and America.
The issue was more than 3 times
oversubscribed.
The proceeds from the bond will be put to work
in India’s housing industry by HDFC, one of
India’s leading banking and financial services
companies.
Joint leads: HSBC and TD Securities.
Geographical Distribution
Americas 56%
EMEA 30%
Asia 14%
World’s first Masala Bond by a foreign government entity on LSE
“This bold move by the Government of B.C.,
to be the first sovereign government to issue
a Masala bond, highlights the confidence that B.C.
and Canada are showing in the Indian economy.”
Nadir Patel, High Commissioner of Canada to India
Source: Bloomberg, GlobalCapital, LSEG database, September 2016
35
Company Details
Company Axis Bank Dubai
Rating Baa3/BBB-
Sector Financials
Market Main Market
Transaction Details
Issue Date 01 Jun 2016
Issue Size USD 500 million
Coupon 2.875%
Yield at issue 2.998%
Maturity 5 years
Company profile
Axis Bank is India’s third largest private bank.
“Axis Bank launched and successfully
completed the first certified Green Bond issue,
the issue we are pleased to list on the London
Stock Exchange today. The encouraging
response to this issue is reflective of the
keenness of global investors to promote and
support a sustainable environment and also
acknowledge Axis's credibility in this space.
The ease of the listing process and breadth of
investors seen in this bond issuance
demonstrates the role London Stock Exchange
can play in supporting India's financing needs.”
Managing Director & CEO of Axis Bank,
Shikha Sharma
Debt issuance story
The proceeds of the bond will be invested in
green energy, transportation and infrastructure
projects, reinforcing India’s commitment to
produce 175,000 MW of renewable power by
2022.
The deal was 2.2 times oversubscribed.
Lowest coupon ever for a 5-year USD bond by
any Indian private sector issuer.
First ever USD green and 144A bond by an
Indian private sector company with 21% of the
investor base being “green” investors.
Joint Leads: Axis Bank SGP, BAML, Citigroup
Global Markets SGP, Credit Agricole CIB HK,
HSBC, JP Morgan Securities Plc, Standard
Chartered Bank.
Geographical Distribution
Asia 48%
Europe 25%
U.S. 16%
Middle East 11%
Distribution by Investor
Banks 30%
Asset Managers 55%
Private Banks 5%
Sovereign wealth
funds/pension funds 10%
India’s first internationally listed certified green bond
“When an Indian company lists securities at
LSE, it gets direct access to many European and
Scandinavian investors. The ease of listing too
attracts many issuers. Besides, LSE remains a
financial hub even after Brexit referendum”
Sidharth Rath, Group Executive, Axis Bank
36
Company Details
Company European Bank of Reconstruction
and Development (EBRD)
Rating AAA / Aaa
Sector Supranational
Market Main Market
Transaction Details
Issue Date 4 Mar 2016
Issue Size INR 5 billion
Yield at issue 6.4%
Maturity 3 years
Company profile
EBRD is a multilateral developmental
international financial institution founded in 1991
that uses investments as a tool to build market
economies. Initially focused on the countries of
the former Eastern Bloc it expanded to support
development in 30 countries from central Europe
to central Asia.
The EBRD is owned by 65 countries and two
intergovernmental institutions (EU and EIB). It
maintains a close political dialogue with
governments, authorities and representatives of
civil society and works in cooperation with
international organisations such as the OECD,
the IMF, the World Bank and UN specialised
agencies.
Debt issuance story
The European Bank for Reconstruction and
Development has been a key issuer of Indian
Rupee denominated bonds in London.
EBRD has raised more than $729m equivalent
on the London market, through six INR
denominated issues with tenors of one, two,
three and four years.
Sole arranger: HSBC.
Using offshore rupee bond issuance as part of a multi-
currency EUR 35bn GMTN Programme
37
• Inter-American Development Bank was the first
issuer of an Indian Rupee denominated bond in
London in 2007. This was the first ever non-
deliverable Indian rupee-denominated bond, cash
settled in dollars using prices in the non
deliverable forward market for Indian rupees.
• Over the years, IDB has raised more than $275m
equivalent on LSE, through 6 INR denominated
issues with tenors of one, two, three and ten
years.
• The IDB, established in 1959, is a supranational
financial institution that uses the resources it
raises in capital markets to support programs that
promote development and economic growth while
respecting and protecting the environment.
• Key initiatives for the progress of its borrowing
member countries include the modernization of
infrastructure, development of alternative energy
sources, and universal access to clean water and
sanitation.
ISIN Issue Date Maturity Tenor Cpn INRbn
XS1016451699 Jan-14 Jul-15 1.5 7.125% 1.00
XS1101962618 Sep-14 Sep-16 2.0 6.100% 4.00
XS0882569568 Feb-13 Jul-15 2.5 5.000% 2.00
XS1103713654 Sep-14 Sep-17 3.0 6.000% 8.50
XS0573957296 Jan-11 Jan-14 3.0 4.750% 17.00
XS0842193475 Oct-12 Oct-15 3.0 4.750% 1.04
XS0495010562 Mar-10 Mar-14 4.0 3.000% 2.00
XS0299574953 May-07 May-17 10.0 8.250% 1.50
38
• In 2014, IFC moved its Treasury function to London.
• In November 2014 International Finance Corporation issued a ten year, 6.3% triple-A rated masala bond,
raising Rs 10 billion and paved the way to increase foreign investment in India, mobilising international
capital markets to support a subsequent infrastructure bond issuance by Axis Bank.
• In April 2015, IFC issued a three-and-a-half year, 6.45% bond that raised Rs 16 billion – the largest ever
Rupee denominated bond issued outside India.
• The program is reflective of the strong partnership between India and IFC. In 2014 IFC committed $1.4 billion
in India along the strategic priorities of promoting inclusive growth, particularly in India’s low income states,
addressing climate change, and supporting economic integration.
• “The stats for trades executed in London and Singapore since the hubs came online speak for themselves: Of
the 150 trades we’ve done this FY, 60% have been executed in London, 20% in Singapore and 20% in DC.”
Ben Powell, Head of Funding, IFC
39
5.00%
5.50%
6.00%
6.50%
7.00%
7.50%
8.00%
8.50%
3 5 7 9 11 13 15
Yie
ld
Maturity (years)
IFC Offshore Rupee Yield Curve
IFC Offshore bond level
IFC had been issuing in the offshore markets at approximately 90 -190 bps below the Government of India onshore yield (at
time of issuance). Through the Masala bond program, IFC has been able to offer clients in India attractive levels of funding
and has invested INR 55.1Bn ($860mm equivalent) in the Indian private sector.
40
Company Details
Company International Finance Corporation
(part of World Bank Group)
Rating AAA / Aaa
Sector Supranational
Market Main Market
Transaction Details
Issue Date 21 Mar 2016
Issue Size INR 2 billion
Yield at issue 7.1%
Maturity 15 years
Company profile
IFC is one of the world’s largest financiers of
climate-smart projects for developing countries,
investing about $11 billion in long-term financing
over the last decade for renewable power,
energy efficiency, sustainable agriculture, green
buildings and private sector adaptation to climate
change.
“IFC’s 15-year masala bond demonstrated long-
term investor confidence in India’s growth,” said
Navtej Sarna, Indian High Commissioner to the
United Kingdom. “Innovative financing
mechanisms like IFC’s Masala program are
critical to mobilize long-term funding for India’s
infrastructure expansion.”
Debt issuance story
Proceeds of the bonds will be used to advance
private sector development in India.
It marks the longest-dated offshore rupee bond to
be issued globally.
The latest 15-year bonds mark the latest step in
IFC’s efforts to extend the yield curve and set a
pricing benchmark for future issuances with
similar maturities. IFC has previously issued
Masala bonds in maturities of three, five, seven
and ten years.
Sole arranger: JP Morgan.
Using offshore rupee bond issuance to finance private
sector development in India
Source: IFC press release, LSEG database, March 2016
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Company Details
Company International Finance Corporation
(part of World Bank Group)
Rating AAA/Aaa
Sector Supranational
Market Main Market
Transaction Details
Issue Date 10 Aug 2015
Issue Size INR 3.15 billion
Yield at issue 6.45%
Maturity 5 years
Company profile
IFC is one of the world’s largest financiers of
climate-smart projects for developing countries,
investing about $11 billion in long-term financing
over the last decade for renewable power,
energy efficiency, sustainable agriculture, green
buildings and private sector adaptation to climate
change.
“Addressing climate change is a priority for IFC in
India. IFC’s green Masala bond demonstrates
the powerful role of capital markets in mobilizing
savings for climate finance—and a listing in
London allows us to attract the widest possible
range of international investors. Adding the rupee
as a new green bond currency also supports our
goals to strengthen this important asset class.”
Debt issuance story
Proceeds from the offering used to finance a
green bond issued by Yes Bank, one of India’s
largest commercial banks. Yes Bank invested the
proceeds of its bond in renewable energy and
energy efficiency projects, mainly in the solar and
wind sectors.
Under its $3 billion offshore rupee Masala bond
program, IFC has issued bonds worth over 103
billion rupees ($1.66 billion) in a range of tenors,
building a triple-A yield curve and attracting new
investors to the London offshore rupee market.
Sole arranger: JP Morgan.
Using Green offshore rupee bond issuance to finance
Indian infrastructure
Source: IFC press release, LSEG database, August 2015
42
Company Details
Company International Finance Corporation
(part of World Bank Group)
Rating AAA / Aaa
Sector Supranational
Market Main Market
Transaction Details
Issue Date 18 Nov 2014
Issue Size INR 10 billion
Yield at issue 6.3%
Maturity 10 years
Company profile
IFC, a member of the World Bank Group, was
established in 1956 and it’s owned 184 member
countries. It finances and provides advice for private
sector ventures and projects in developing countries
in partnership with local private entities.
IFC is the largest global development institution
focused exclusively on the private sector in
developing countries.
IFC’s mission is to allow companies and financial
institutions in emerging markets to create jobs,
generate tax revenues, improve corporate
governance and environmental performance, and
contribute to their local communities.
Debt issuance story
The bonds were priced 200bps inside equivalent
bonds issued by the Indian Government.
The bonds’ principal amounts are linked to the
Indian rupee exchange rate. U.S. dollar proceeds
from the bonds will be converted to rupees in the
domestic spot exchange market.
Vast majority of investors were European
insurance companies.
Proceeds from the offering used to support an
infrastructure bond issuance by Axis Bank.
Sole arranger: JP Morgan.
Source: IFC press release, LSEG database, November 2014
Using offshore rupee bond issuance to finance Indian
infrastructure
43
Criteria Main Market
Security type Fixed Income
Official list status Listed
Regulated EU Regulated
Sponsor / Nomad Not Required
Corporate governance A Code
Regulatory supervision UKLA
Legislation LR/PD/TD/MAR/A&Ds
Types of companies Large multinationals
Premise Debt issuers seeking high profile
listing
Eligible investors Professional and retail
Main Market
Description
Flagship Market: The London Stock Exchange’s Main Market is the world’s
most international market for the admission and trading of equity, debt and
other securities, providing access to Europe’s deepest capital pool
Located at the heart of the world’s leading financial centre: The ideal
home to over 2,600 debt issuers from 60 countries, including many of the
world’s largest, most successful and most dynamic companies
High Profile Listing: Exposes debt securities to a wide audience of financial
market participants, boosting the profile of the listing
High regulatory standards: Underpinned by London’s balanced and
globally-respected standards of regulation and corporate governance, the
Main Market represents a badge of quality for every company admitted to and
traded on it and an aspiration for many companies worldwide
Broad range of eligible investors: The Main Market’s status as a listed and
regulated market offers flexibility both to issuers and holders of debt finance.
Its focus, therefore, is on the broadest range of institutional and retail
investors
Liquidity: Offers a number of secondary market order-book solutions while
providing access to London’s deep pool of international eurobond liquidity
Cost saving: Offers cost savings as London is the only major European
listing venue with no annual fees to debt issuers
45
Criteria PSM
Security type Fixed Income
Official list status Listed
Regulated MTF
Sponsor / Nomad Not Required
Corporate governance Domestic
Regulatory supervision UKLA
Legislation LR/LP/MAR/A&Ds
Types of companies Emerging Markets
Premise Debt issuers using local GAAP
Eligible investors Professional only
Description
Lighter Regulation: Outside scope of EU Prospectus and Transparency
Directives
No EU Passport: Designed to meet financing needs of issuers who do not
require EU passport
Alternative Accounting Standards: Offers alternative for issuers not wishing
to prepare financial information to IFRS, and ability to report under national
GAAP
Lower Denomination requirements: Distinction between wholesale and
retail does not apply, which allows securities to be issued in denominations
lower than €100K but under the wholesale regime
Lower disclosure requirements: Offers full listed status but with lower levels
of disclosure and continuing obligations than what would be required on EU-
Regulated Main Market
Liquidity: Offers a number of secondary market order-book solutions while
providing access to London’s deep pool of international eurobond liquidity
Cost saving: Offers cost savings as London is the only major European
listing venue with no annual fees to debt issuers
Professional Securities Market
46
UKLA Listing Requirements Checklist
Source: UKLA website
LR 2
Required by
LR17.2.1
Rule Description
2.2.1 (1) Applicant Duly incorporated The applicant must be validly established according to the relevant laws of its place
2.2.1 (2) Conformity with constitution The applicant must be operating in conformity with its constitution
2.2.2 (1) Conforms with law of place of constitution Securities must conform with the law of the applicant’s place
2.2.2 (2) Duly authorised Securities must be authorised according to the applicant’s constitution
2.2.2 (3) Statutory and other consents Securities must have necessary statutory or other consent
2.2.3 Admitted on Recognised Investment
Exchange (RIE) Securities must be admitted to trading on a RIE market for listed securities
2.2.4 (1) Freely transferable The listed securities must be freely transferable
2.2.7 (1) Minimum market capitalisation The expected aggregate amount value of the securities must be at least £ 200,000
2.2.9 (1) Whole class to be listed If no securities of that class are already listed, the new securities class must relate to all
securities of that class issued or proposed to be issued
2.2.10 (2)(a) Prospectus approved by FCA and published A prospectus must be approved by the FCA
2.2.10 (2)(b) Other EEA is Home Member State for the
securities
The relevant competent authority must supply the FCA with a certificate of approval, a
copy of the prospectus as approved and a translation of the summary of the prospectus.
2.2.11 (2) Listing Particulars approved Listing particulars for the securities must have been approved by the FCA
2.2.12 (1) Convertible into listed securities Convertible securities may be admitted to listing only if the securities into which they are
convertible are listed securities
2.2.12 (2) Convertible into recognised market
securities
Convertible securities may be admitted to listing only if the securities into which they are
convertible are securities listed on a regulated, regularly operating, recognised open
market
47
Ongoing Obligations of Debt Issuers
London Stock Exchange’s Regulated Market (Main Market) – EEA Regulated The Professional Securities (PSM) (Unregulated Market) – Exchange Regulated
Relevant legislation and rules
Disclosure and Transparency Rules (DTR)
Listing Rules (LR)
Disclosure and Transparency Rules (DTR)
Listing Rules (LR)
Accounts Wholesale
Issuers with debt securities in denominations of EUR100,000 (or equivalent) and above do not have to comply with the periodic financial requirements set out in the Transparency Directive (implemented by DTR 4).
However, under LR 17.3.4, annual report and accounts must be approved and published within six months of the year end, and must be independently audited and prepared in accordance with the issuer’s national accounting standards or IAS.
No requirement to produce half-yearly reports.
Retail
Annual reports must be prepared and published within four months of the year end and to be publicly available for at least five years (DTR 4.1.3 and 4.1.4).
Half-yearly reports must be prepared and published within two months of the period to which it relates and to be publicly available for at least five years (DTR 4.2.2).
The PSM does not distinguish between wholesale and retail issuers.
LR 17.3.4 requires Issuers to publish their annual report and accounts. These must be approved and published within six months of the year end, and must be independently audited and prepared in accordance with the issuer’s national accounting standards or IAS.
No requirement to produce half-yearly reports.
Inside Information
If there is any inside information that directly concerns the issuer, the issuer must disclose such information as soon as possible through a Regulated Information Service (RIS) to the market (DTR 2.2).
The issuer, and those acting for it must prepare and keep up-to-date lists of individuals working for them with access to inside information. The insider list must name each insider, state the reasons for the insider’s inclusion on the list, and include the date of creation and update the list (DTR 2.8).
Issuers are required to comply with DTR 2, which details with disclosure and control of information by issuers, in the same way as an issuer with securities admitted to trading on a Regulated Market (LR 17.3.9).
If there is any inside information that directly concerns the issuer, the issuer must disclose such information as soon as possible through a RIS to the market (DTR 2.2)
The issuer, and those acting for it must prepare and keep up-to-date lists of individuals working for them with access to inside information. The insider list must name each insider, state the reasons for the insider’s inclusion on the list, and include the date of creation and update the list (DTR 2.8).
48
Ongoing Obligations of Debt Issuers (cont’d)
London Stock Exchange’s Regulated Market (Main Market) – EEA Regulated The Professional Securities (PSM) (Unregulated Market) – Exchange Regulated
Dissemination of Information
The issuer is required to comply with DTR 6.3, which dictates how information should be disseminated to the market.
Information required to be disclosed under the DTRs must fall within the definition of “regulated information”.
Regulated information must be disseminated to as wide a public as possible and simultaneously in the Home Member State and other EEA states.
In effect, this rule obliges an issuer to make use of a RIS and adhere to other minimum requirements when disclosing, for example, inside information.
An annual report is not required to be communicated to the media in full unedited text unless it is the type that would be required to be disseminated in half-yearly financial report.
Under LR 17.2.9B, the issuer is required to comply with DTR 6.3, which dictates how much information should be disseminated to the market.
Information required to be disclosured under the DTRs must fall within the definition of “regulated information”.
Regulated Information must be disseminated to as wide a public as possible and simultaneously in the Home Member State and other EEA states.
In effect, this rule obliges an issuer to make use of a RIS and adhere to other minimum requirements when disclosing, for example, inside information.
Other relevant continuing obligations
Ensure equal treatment for all holders of the debt securities ranking pari passu in respect of all rights attaching to the debt securities (DTR 6.1.3).
Make public without delay any change in the rights of holders of the debt securities including changes in the terms and conditions of the debt securities which could indirectly affect those rights, resulting in particular from a change in loan terms or in interest rates (DTR 6.1.10).
Publish notices/distribute circulars concerning bondholder meetings, payment of interest, exercise of conversion, exchange, subscription or cancellation rights and repayment (DTR 6.1.14).
Make public without delay any new loan issues and in particular of any guarantee or security in respect thereof (DTR 6.1.11).
Ensure that all the necessary facilities and information are available publicly to enable holders of the debt securities to exercise their rights (DTR 6.1.4).
Where the issuer proposes to amend its instrument of incorporation or statutes, it shall provide the draft amendment to the FSA. Such submission shall be effected without delay and must, at the latest, be provided on the date of the general meeting called on to vote on, or be informed of, the amendment (DTR 6.1.2).
All holders of debt securities must be given equal treatment in respect of rights.
Any changes to the rights must be disclosed to the public without delay.
49
Active Masala Bonds
ISIN Issuer Name Coupon (%) Currency Amount
Raised Issue Date Maturity Date
XS1486517367 Housing Development Finance Corporation Ltd 7 INR 15,000,000,000 09/09/2016 01/09/2020
XS1487470244 Province of British Columbia Canada 6.6 INR 5,000,000,000 09/09/2016 01/09/2020
XS1467374473 National Thermal Power Corporation 7.375 INR 20,000,000,000 10/08/2016 10/08/2021
XS1452352609 Housing Development Finance Corporation Ltd 7.875 INR 30,000,000,000 21/07/2016 21/08/2019
US45950VHT61 International Finance Corp 7.1 INR 2,000,000,000 21/03/2016 21/03/2031
XS1374467238 European Bank for Reconstruction & Development 6.4 INR 5,000,000,000 04/03/2016 04/03/2019
US45950VGQ32 International Finance Corp 6.45 INR 3,150,000,000 10/08/2015 10/08/2020
US45950VGD29 International Finance Corp 6.45 INR 18,000,000,000 30/04/2015 30/10/2018
XS1172671130 European Bank for Reconstruction & Development 5.1 INR 3,111,000,000 02/02/2015 02/02/2017
US45950VEM46 International Finance Corp 6.3 INR 10,000,000,000 17/11/2014 25/11/2024
XS1127911672 European Bank for Reconstruction & Development 5.625 INR 5,500,000,000 28/10/2014 15/03/2017
XS1111087224 European Bank for Reconstruction & Development 5.75 INR 3,000,000,000 19/09/2014 19/03/2018
XS1103713654 Inter-American Development Bank 6 INR 8,500,000,000 05/09/2014 05/09/2017
XS0299574953 Inter-American Development Bank 8.25 INR 1,500,000,000 15/05/2007 15/05/2017
Masala Bonds on London Stock Exchange
51
Matured Masala Bonds
ISIN Issuer Name Coupon (%) Currency Amount
Raised Issue Date Maturity Date
XS1246886128 European Bank for Reconstruction & Development 6.3 INR 1,900,000,000 24/06/2015 24/06/2016
XS1105873688 European Bank for Reconstruction & Development 6 INR 25,000,000,000 03/09/2014 03/03/2016
XS1101962618 Inter-American Development Bank 6.1 INR 4,000,000,000 02/09/2014 02/09/2016
XS1076809182 European Bank for Reconstruction & Development 6.2 INR 8,000,000,000 27/06/2014 27/06/2015
XS1029172605 European Bank for Reconstruction & Development 7.65 INR 10,350,000,000 18/02/2014 18/02/2015
XS1016451699 Inter-American Development Bank 7.125 INR 1,000,000,000 24/01/2014 24/07/2015
XS0991636233 European Bank for Reconstruction & Development 8 INR 2,250,000,000 12/11/2013 12/11/2014
XS0935943802 European Bank for Reconstruction & Development 5 INR 12,000,000,000 28/05/2013 28/05/2015
XS0878431492 European Bank for Reconstruction & Development 5.25 INR 8,750,000,000 07/02/2013 07/02/2014
XS0882569568 Inter-American Development Bank 5 INR 2,000,000,000 04/02/2013 24/07/2015
XS0842193475 Inter-American Development Bank 4.75 INR 1,040,000,000 25/10/2012 25/10/2015
XS0632507322 European Bank for Reconstruction & Development 5.25 INR 5,000,000,000 06/06/2011 06/06/2014
XS0616450127 European Bank for Reconstruction & Development 5.5 INR 2,000,000,000 19/04/2011 19/10/2012
XS0587410514 European Bank for Reconstruction & Development 5.25 INR 2,700,000,000 15/02/2011 15/08/2012
XS0589595700 Morgan Stanley 7 INR 70,000,000 11/02/2011 11/02/2014
XS0573957296 Inter-American Development Bank 4.75 INR 17,000,000,000 10/01/2011 10/01/2014
XS0495010562 Inter-American Development Bank 3 INR 2,000,000,000 25/03/2010 25/03/2014
XS0312041782 European Bank for Reconstruction & Development 7 INR 1,000,000,000 30/07/2007 30/07/2012
XS0294623482 Barclays Bank PLC - INR 2,000,000,000 10/04/2007 17/01/2017
Masala Bonds on London Stock Exchange
52
London Stock Exchange’s Fixed Income Team
Primary Markets
Global Head of Fixed Income Pietro Poletto +39 02 7242 6243 [email protected]
UK Head of Fixed Income Darko Hajdukovic +44 20 7797 3306 [email protected]
Fixed Income Product Specialist Lillian Georgopoulou +44 20 7797 3482 [email protected]
Fixed Income Product Specialist Elena Chimonides +44 20 7797 1509 [email protected]
Secondary Markets
Global Co-Heads of Equity, Funds, Fixed Income Pietro Poletto
Brian Schwieger
+39 02 7242 6243
+44 20 7797 3860
For further information refer to www.lseg.com 53
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