The proceeds of the Eurivex bonds, with ISIN CY0240642112 will be used to invest in Eurozone and Cyprus government T-bill auctions of 13-week maturity held on a monthly basis and in other private equity deals.

The bonds have been deposited with Eurivex and are only eligible to be traded provided both buyer and seller of the bonds have opened and maintain an active account with Eurivex. No arrangements have been made to allow for transfer of the Notes to other Depositories. For this purpose, the listing on the Vienna MTF is in book-entry form and no trading will be allowed on the trading system of the Vienna MTF.

Performance Linked Notes

Performance-linked Notes (PLNs) are debt instruments, a bond, that differs from a standard fixed-income security in that the regular and final payouts are based on the return of the underlying asset, which can be a portfolio of securities, equity indices, real estate assets, investment funds, private equity investments, or any combination of all the aforementioned.

Eurivex intends to invest the proceeds of the PLN issue mainly in the Eurozone and Cyprus T-bills of 13-week maturity issued by Eurozone Governments (Cyprus, Germany etc), which are held on a monthly basis through auctions.

About Eurivex

Eurivex Ltd, was incorporated in Cyprus on 28 September 2009, with registration number HE 255430 as a private company, limited by shares.

Eurivex (https://www.eurivex.com/) is an EU Investment Firm regulated by the Cyprus Securities & Exchange Commission (CySEC), number 114/10 and licensed to deal in financial markets and hold custody of client financial instruments.

Established in 2009, Eurivex received its regulatory license from CySEC in March 2010. More licensing information available from our Regulator’s web link at https://www.cysec.gov.cy/en-GB/entities/investment-firms/cypriot/37682/

Eurivex specializes in helping companies list their financial instruments on recognized stock exchanges, acts as Custodian and Depository for Alternative Investment Funds (AIFs) and Registered Alternative Investment Funds (RAIFs) and allows investors to trade in financial instruments via the Eurivex automated trading system.

Listing information available at https://www.wienerborse.at/en/market-data/bonds/quote/?ISIN=CY0240642112&ID_NOTATION=439927826&cHash=2a715ffdb5baec92ee68cba4df697e71

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Convertible bonds are popular since they pay a regular return via coupon payments, but at the same time they give the right or the option to the bondholder to own the shares of the underlying company at a later date, or simply allow the bonds to expire and receive full payment of capital invested.

The price of the convertible bond may increase sharply in cases when the strike price at which the convertibles are converted into shares is significantly lower than current market price of the underlying shares, when such shares are publicly traded.

Investors must evaluate the risk of investing, since as with all other corporate bonds, there is always the risk that the legal entity which issued the bonds may default. Before making an investment, investors must check that the issuer is a mature, established business with strong and well-established management team, has positive cashflow to make sure that it can pay the promised coupon and generally has sound financial position.

Why do companies issue convertible bonds? 

Companies issue convertible bonds for two main reasons according to Investopedia. The first is to lower the coupon rate on debt. Investors will generally accept a lower coupon rate on a convertible bond, compared with the coupon rate on an otherwise identical regular bond, because of its conversion feature. This enables the issuer to save on interest expenses, which can be substantial in the case of a large bond issue.  

The second reason is to delay dilution. Raising capital through issuing convertible bonds rather than equity allows the issuer to delay dilution to its equity holders.

Forced conversion  

One downside of convertible bonds is that the issuing company has the right to call the bonds. In other words, the company has the right to forcibly convert them. 

The Bond can be converted during the bond’s lifetime by the bondholder whenever the issuing company has any private or public share offering or according to the terms of issue.

If the bondholder does not convert their bonds and no mandatory conversion occurs, the bond matures at the end of its lifetime. The issuing company then pays the bondholder the principal amount invested.

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The Multilateral Trading Facilities (MTF) are a form of “lite exchange” because they provide similar or competing trading services, such as rulebooks and market surveillance departments, but operate through simplified procedures and at very competitive fees than what it would cost to list financial instruments (shares, bonds, funds) on the traditional stock market segments.

The MTF Market of Vienna Stock Exchange (Vienna MTF) is operated by the regulated Vienna Stock Exchange.

MAIN ADVANTAGES

The biggest advantages for listing in MTF Markets are:

1. There is no need to submit prospectus. Listing is done through simplified method.
2. All major currencies possible.
3. There is no minimum or maximum ownership rule.
4. There is no minimum volume rule. This means even if for the whole year there is no volume traded on the financial instruments, this is acceptable.
5. Startups without prior history can list their financial instruments.
6. Listing is secured on average in 2 weeks.
7. All applications submitted by e-mail.
8. Listing costs are significantly lower.
9. The level of reporting after listing is negligible.
10. Trading in the financial instruments is done via brokers.

TYPES OF BONDS

The Vienna Stock Exchange allows for most types of bond listings:

• Traditional bonds with fixed coupon
• Floating rates
• Zero coupon bonds
• Performance linked bonds*, whose value is tied to the performance of the underlying asset.

*Performance Linked Bonds are increasingly becoming attractive since they spread the risk of performance on the investors.

Such Performance Linked Bonds may also be used for trading in capital markets in derivative products such as trading in shares, bonds and forex. When the trading performance is positive, the NAV will increase, whereas if there are trading losses, the NAV will decline.

SIMPLIFIED PROCEDURES

One of the key advantages of listing on the Vienna MTF is that the Exchange accepts all documentation in English and by e-mail.

Listing authorisation is secured directly from the Exchange and not through the regulator.
Eurivex, acting as listing agent will prepare the Information Memorandum as well as Terms and Conditions of the bond issue and liaison with the Vienna Stock Exchange until the listing is secured.

CLEARING & SETTLEMENT, TRADING

The Issuer needs to furnish evidence that it meets the requirements for including in trading pursuant to Exchange rules, which means the clearing and settlement need to be established in Euroclear, Clearstream or the UK’s CREST.
Bonds are traded on Xetra trading system, but Issuer is under no obligation to provide liquidity/to quote, since no actual trading is legally required.

DOCUMENTS REQUIRED

Issuer will need to furnish full corporate documents including Certificate of Incorporation, Shareholder and Director Registry, Memorandum & Articles of Association as well as provide basic KYC documentation of Company directors/principal owners.

Issuer will also provide additional information in order for Eurivex to prepare the Information Memorandum and other documents required for the listing.

TIME FRAME

When all the documents in the correct form have been provided, it will take Eurivex 1-2 weeks to prepare and submit the first draft Information Memorandum to the Vienna Stock Exchange for review, secure the ISIN, complete the bond dematerialization and electronic delivery to the clearing and settlement destination and secure the final listing approval after 1 week.

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