Capital Markets: Debt 2019 Comparisons

Last Updated June 10, 2019

Contributed By DLA Piper Spain

Law and Practice

Authors



DLA Piper Spain has a capital markets team in Madrid comprised of seven senior capital markets specialists, who are supported by junior lawyers from the general corporate area (comprised of 25 lawyers). The firm is a global legal services organisation with over 4,200 lawyers located in more than 30 countries. The global capital markets group is based in London and works closely with experienced capital markets lawyers in DLA Piper's offices across Europe, the Middle East, Africa, the USA and Asia. The practice group comprises more than 175 lawyers worldwide and offers integrated securities advice on complex, cross-border transactions requiring support under different laws. The firm’s lawyers advise issuers, underwriters, selling shareholders, sponsors, arrangers, lead managers, originators, dealers, trustees and depositaries on a broad range of securities offerings, including equity, equity-linked and debt securities, as well as structured and project financings and securitisations.

The Spanish debt securities market includes:

  • A single debt regulated market, AIAF Mercado de Renta Fija (“AIAF”), which is the main debt securities market in Spain for both private and public debt issuances addressed to institutional and retail investors. Corporate debt securities issued by Spanish companies to be listed on the AIAF regulated market include, amongst others, fixed or floating interest rate debt securities, secured or unsecured, senior or subordinated, guaranteed or unguaranteed, bonds convertible into newly issued equity securities or exchangeable for existing equity securities, structured bonds, asset-backed securities and commercial paper; and
  • two multilateral trading facilities (“MTFs”), namely, the Electronic Financial Assets Trading System (Sistema Electrónico de Negociación de Activos Financieros) (“SENAF”), which is addressed to institutional investors interested in debt securities issued by the Spanish public administrations, and the Alternative Fixed-income Market (Mercado Alternativo de Renta Fija) (“MARF”), which is addressed to institutional investors interested in corporate debt securities issued by medium-sized (and typically, unlisted) private companies, with attractive business prospects.

MARF has its own set of regulations characterised by less burdensome admission-to-listing requirements than those applicable in the AIAF regulated market.

The Spanish securities clearing and settlement system applicable to both the securities listed on the AIAF regulated market and the MTFs is held by Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A.U. (“Iberclear”).

Both the AIAF regulated market and the MTFs, as well as the clearing and settlement system of the securities traded through those markets, are managed by different companies, such as Iberclear, belonging to the group of companies controlled by Bolsas y Mercados Españoles, Sociedad Holding de Mercados y Sistemas Financieros, S.A. (“BME”), a Spanish listed company whose major shareholders are the largest Spanish financial entities listed on the Spanish Stock Exchanges.

Due to the relatively minor importance of MARF compared to the relevance of the AIAF regulated market (EUR3.9 billion and EUR120 billion of new private debt issuances, respectively, during year 2017) and the fact that SENAF is reserved to public debt issuances, the analysis provided throughout the Spanish chapter of this guide focuses on private debt issuances listed on the AIAF regulated market.

With regard to debt indices, the reference index for private fixed-income yields in Spain would be “AIAF 2000”, which takes as a reference date 1 January 2000, the date on which it was launched. It measures the accumulated profitability of private debt issuances on the AIAF regulated market through the evolution of historical market prices, as well as through the effectively paid returns, which are used to correct the index.

The main regulatory bodies governing debt securities listings on AIAF are as follows:

  • The Spanish National Securities Market Commission (Comisión Nacional del Mercado de Valores) (the “CNMV”), which is the public authority in charge of the supervision and inspection of the Spanish securities market, will verify compliance with the requirements necessary for the admission to listing of the offered debt securities on AIAF, monitor the publicity related to the debt offering, approve and register the informative prospectus, as the main document concerning the offering (see 6 Offering Documents) and request the presentation and filing of the periodic financial information, the price-sensitive information notices and the relevant fact notices.
  • Bolsas y Mercados Españoles Renta Fija, S.A.U., a BME company, which is the managing entity (sociedad rectora) of the AIAF regulated market responsible for approving the formal resolution regarding the admission to listing of the offered debt securities on AIAF.
  • Iberclear, as the entity managing the Spanish securities clearing and settlement system.

As a general rule, the following applications must be made in the process of a debt securities listing on AIAF:

  • An application must be made to the CNMV requesting the opening of an administrative procedure regarding the revision, registration and approval by the CNMV of an informative prospectus and complementary documentation (see Section 6 “Offering Documents” below);
  • Following the registration and approval by the CNMV of the informative prospectus, an application must be made to Iberclear requesting the registration of the offered debt securities in book-entry form with Iberclear;
  • Following the registration of the offered debt securities in book-entry form with Iberclear, an application must be made to the CNMV requesting the positive verification of compliance with the necessary requirements for the admission to listing of the offered debt securities on AIAF; and
  • Following the CNMV’s positive verification, an application must be made to AIAF’s managing entity requesting the approval of the admission to listing of the offered debt securities on AIAF.

The main differences between the process of (i) a standalone debt offering, (ii) the establishment of a debt issuance programme, and (iii) an issuance of debt under a programme relate to the documentation requirements which are further analysed under 6 Offering Documents below.

See 1.1 Main Markets & Exchanges: Rules or Governance and Indices.

See 1.1 Main Markets & Exchanges: Rules or Governance and Indices.

See 1.1 Main Markets & Exchanges: Rules or Governance and Indices.

See 1.1 Main Markets & Exchanges: Rules or Governance and Indices.

See 1.1 Main Markets & Exchanges: Rules or Governance and Indices.

The general legal framework governing debt securities issuances in Spain is contained in the consolidated text of the Capital Companies Law, approved by Royal Legislative Decree 1/2010, of 2 July (texto refundido de la Ley de Sociedades de Capital, aprobado por el Real Decreto Legislativo 1/2010, de 2 de julio) (the “Spanish Capital Companies Law”).

As far as listing of securities is concerned, the legal regime results from the implementation into the Spanish legislation of the provisions set forth in Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 (the “Prospectus Directive”), Directive 2001/34/EC of the European Parliament and of the Council of 28 May 2001 on the admission of securities to official stock exchange listing and on information to be published on those securities, and Commission Regulation (EC) 809/2004 of 29 April 2004 implementing the Prospectus Directive (the “Prospectus Regulation”).

The legal regime on debt listings in Spain is governed by the restated text of the Securities Market Law, approved by Royal Legislative Decree 4/2015, of 23 October 2015 (the “Spanish Securities Market Law”), and Royal Decree 1310/2005, of 4 November 2005, which partially implements the Securities Market Act in relation to the admission to listing of securities on official secondary markets, public offerings, and the prospectus required for these purposes (“Royal Decree 1310/2005”).

The Prospectus Directive referred to above will be entirely repealed on 21 July 2019, on the occasion of the full entry into force of Regulation (EU) 2017/1129, of the European Parliament and of the Council, of 14 June 2017, on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (“Regulation (EU) 2017/1129”). However, as stated in certain of the forthcoming sections of this chapter, some of the provisions of Regulation (EU) 2017/1129, according to Article 49 of Regulation (EU) 2017/1129 (Entry into force and application) and in light of the direct effect principle applicable to European Union Regulations, are currently applicable in Spain and must be considered when analysing the legal framework applicable to debt listings in our jurisdiction.

Eligibility requirements for issuers wishing to undertake a standalone listing of debt securities or set up a debt issuance programme for debt securities to be listed on the AIAF regulated market are as follows:

  • The issuer must be validly incorporated and existing in accordance with the laws of Spain or the laws of their home State jurisdictions in the case of foreign issuers and prove such.
  • The application for admission to listing must refer to all the securities being the subject of the same issuance, which in turn must:

i)       Be freely transferable.

ii)       Meet the requirements of the laws to which they are subject.

iii)       Be represented in book-entry form.

iv)       Reach an aggregate nominal value of, at least, EUR200,000 on the occasion of        the first admission to listing of a particular type of debt securities. Such a threshold will not apply when debt securities of the same class have already been admitted to listing. In the case of continued issuances of debt securities under a programme, the aggregate nominal value will be calculated with respect to the overall amount of the programme.

v)       The trading of the securities in AIAF occurs electronically, in nominal euros.

  • In addition to the foregoing eligibility requirements applicable to the issuer and the debt securities for which admission is sought, the issuer must prepare and file with the CNMV the historical financial information covering the preceding two financial years (or any such shorter period during which the issuer has been in operation) drawn up in accordance with the laws to which the issuer is subject, together with the audit report in respect of each year.

See 2.1 Key Legislative or Regulatory Instruments.

See 2.1 Key Legislative or Regulatory Instruments.

See 2.1 Key Legislative or Regulatory Instruments.

See 2.1 Key Legislative or Regulatory Instruments.

See 2.1 Key Legislative or Regulatory Instruments.

See 2.1 Key Legislative or Regulatory Instruments.

The main steps for an issuer considering a standalone listing of debt securities on the AIAF regulated market would be as follows:

  • Appointment of advisers: the first steps for an issuer considering a standalone listing of debt securities on AIAF must be directed to retain a variety of advisers to accompany and assist the company in the design, structuring and implementation of the transaction and in preparing the company to meet the requirements to which it will be subject immediately following the admission to listing (see 5 Parties to an Offering of Debt Securities for a detailed description of each adviser’s duties).
  • Design and structuring of the offering: the issuer must decide whether the offering will be designed as an institutional offering, exclusively addressed to qualified investors, which as a non-public offering according to Spanish applicable regulations, will be subject to less burdensome regulatory requirements, or a public offering, including retail investors. Debt securities issuances structured as public offerings are fairly infrequent in Spain. Depending on whether the offering is structured as a public offering or as a non-public offering, a so called “sale prospectus” or “listing prospectus” would be required (see 6 Offering Documents).

It is worth mentioning that in debt securities issuances addressed to retail investors considered to be a public offering, in the absence of a tranche addressed to professional investors, at least one report from an independent expert must be annexed to the prospectus in order to determine whether the terms and conditions of the issuance are comparable to those that would be applicable to a similar issuance addressed to the professional market.

The placement among retail investors by credit entities of issuances of preferred securities, convertible debt instruments and subordinated debt computable as equity own resources under credit entities solvency regulations, will require: (i) at least, 50% of the issuance is reserved to a tranche exclusively addressed to professional investors, which may not be made up of less than 50 investors; and (ii) the minimum nominal unit value per security is EUR100,000 in the case of issuances of preferred securities or convertible debt instruments of non-listed companies, and EUR25,000 in the case of the remaining issuances. Except for the above-mentioned issuances, in the case of debt securities offerings addressed to both institutional and retail investors, the issuer will be free to allocate the debt securities offered amongst the different tranches of prospective investors (institutional, retail, employees, etc) in the proportion it deems appropriate.

Likewise, the issuer must decide whether the offering will be a domestic offering, ie, exclusively limited to Spain, or if it will have an international scope. In the latter case, the extra-territoriality of the United States of America securities markets regulations will entail the need to retain US legal counsel to prevent falling in any of the scenarios where registration of the offering with the US regulator would be required under such regulations.

  • Contractual considerations: the issuer must review those contracts to which it is a party which may be affected as a result of the admission to listing in order to provide for the prompt execution of the appropriate waiver, amendment (or, if necessary, termination) agreements thereof in advance of the admission to listing.
  • Business and financial due diligence: the issuer and the investment banks acting as financial advisers in the transaction must go through a thorough due diligence process to identify all the information which is deemed necessary to be provided to the investors in the prospectus.
  • Considerations regarding foreign issuers:

European Union cross-border passport mechanism

In accordance with the European Union cross-border passport mechanism, the prospectus approved by the competent authority of any given European Union Member State, as well as its supplements, will be valid for an admission to listing of securities on the AIAF regulated market, provided that said competent authority appropriately certifies to the European Securities and Markets Authority (“ESMA”) and the CNMV the approval of the prospectus and remits a copy of the prospectus. In this case the CNMV will refrain from further clearing the prospectus.

The summary of the prospectus will be translated into Spanish.

Listing by a company domiciled in a non-EU Member State

The listing of the securities issued by a company that has its registered office in a State that is not a member of the European Union, which identifies Spain as the home Member State, must be approved by the CNMV. The prospectus may be prepared according to the legislation of the State of the issuer, provided that: (a) it has been prepared in accordance with international standards, and (b) the information requirements, including information of a financial nature, are equivalent to those required by the regulations applicable in Spain.

In this case, the prospectus must be drafted, at the discretion of the person requesting admission, in Spanish, in a language which is common in the field of international finance or in another language which is accepted by the CNMV.

See 3.1 Main Steps for a Standalone Listing of Debt Securities.

See 3.1 Main Steps for a Standalone Listing of Debt Securities.

See 3.1 Main Steps for a Standalone Listing of Debt Securities.

See 3.1 Main Steps for a Standalone Listing of Debt Securities.

The steps for an issuer considering setting up an issuance programme for debt securities to be listed on the AIAF regulated market would be essentially the same as those described in 3 Standalone Listings above, the only difference being the offering documentation requirements which are further analysed under 6 Offering Documents.

Apart from the issuer, the CNMV, the managing entity of AIAF and Iberclear (see 1 Debt Markets/Exchanges above), the rest of the parties to an offering of debt securities are the advisers retained by the issuer to provide assistance during the transaction process.

  • Key advisers. General considerations regarding a debut listing: The key advisers and their respective roles are as follows:

(i)              Investment banks: they will provide the issuer with commercial advice on the structuring and implementation of the transaction.

(ii)       Legal counsel: the issuer will retain legal counsel to assist the issuer in drafting all necessary documentation, including corporate resolutions and offering specific documents (mainly, the prospectus and the applications to be filed with the CNMV, the managing entity of AIAF, Iberclear and other authorities which may eventually be involved in the transaction), the negotiations of the underwriting agreement with the investment banks, and the legal side of the due diligence process. The issuer’s legal counsel will issue the customary existence and capacity legal opinions.

(iii)       Issuer’s auditors: the issuer will generally need to have audited its annual financial statements for the two financial years preceding the admission to listing. In addition to the foregoing, following the issuer’s request, auditors may audit or perform a limited review of interim financial information and, where applicable, other special financial information packages such as pro forma financial information, forecasts or estimates.

In addition to the foregoing, the auditors will issue, for the underwriters’ benefit, the so called “comfort letters” confirming that the prospectus accurately reflects the issuer’s financial information and including in the conclusion their limited assurance expression.

(iv)       Agent bank: the issuer will need to retain a financial entity which shall be an Iberclear participant responsible for, amongst other things, handling the disbursement, clearing and settlement process of the offering with the appropriate regulatory bodies, providing the financial entities through which the investors may submit the appropriate subscription or purchase proposals, as well as the underwriters, with the necessary instructions for the execution of the offering and co-operating with the issuer and the underwriters in the allocation of the offered securities to the final investors through Iberclear’s facilities.

  • The role of the advisers regarding a draw-down under an existing programme: the role of the advisers retained by the issuer to provide assistance during a draw-down under an existing programme will be significantly reduced and limited to the activities specifically related to the debt securities effectively issued under the programme.

See 5.1 Advisers Appointed in Connection with the Issuance.

See 5.1 Advisers Appointed in Connection with the Issuance.

General considerations

Notarial public deed describing the terms and conditions of the debt securities offering

The Spanish Capital Companies Law establishes, as a general rule, that any debt securities issuance must be formalised through a public deed granted before a Spanish notary public containing the terms and conditions of the debt securities and must be registered with the Commercial Registry. Notwithstanding the foregoing, certain exceptions apply to this general rule. According to the Spanish Securities Market Law, the public deed requirement will not apply to the following debt securities issuances, when the debt securities:

  • are intended to be admitted to listing on a Spanish regulated market, such as AIAF;
  • are subject to a public offering that requires the approval by and registration with the CNMV of an informative prospectus prior to the distribution of the securities; or
  • are intended to be admitted to listing on a Spanish MTF (such as MARF).

In light of the foregoing, none of the debt securities issuances to which this chapter refers will be subject to the obligation to grant before a Spanish notary public and have registered with the Commercial Registry a public deed describing the terms and conditions of the debt securities, save for the issuances of bonds exchangeable for or convertible into shares of the issuer or shares of a company pertaining to the issuer’s group, which will not benefit from the above-mentioned exceptions.

Informative prospectus

The prior presentation, approval and registration with the CNMV and the subsequent publication of an informative prospectus that conforms to the provisions of the relevant regulations applicable in Spain will be mandatory for:

  • the conduct of a public offering of securities in Spain; and
  • any admission of securities to listing on a Spanish regulated market, such as AIAF, with very limited exceptions.

The prospectus must be comprised of: (i) a registration document (documento de registro) disclosing material information about the issuer, such as its business, financial position, organisational structure, management and shareholders; (ii) a securities note (nota de valores) referring to the terms and conditions of the offering and the rights and obligations attached to the offered debt securities, and (iii) a summary note (resumen) thereto.

The prospectus must contain all the information which is deemed necessary to provide the investors with sufficient data as to make an informed assessment of the assets and liabilities, financial position, profit and losses and prospects of the issuer and the rights attached to the debt securities offered. These content requirements do not differ in the case of specialist companies (eg, mining companies, scientific companies or real estate companies).

As described under “Design and structuring of the offering” in 3.1 Standalone Listings, the prospectuses concerning debt securities issuances addressed to retail investors considered to be a public offering, in the absence of a tranche addressed to professional investors, must be accompanied by at least one report from an independent expert determining whether the terms and conditions of the issuance are comparable to those that would be applicable to a similar issuance addressed to the professional. Once the prospectus is approved by the CNMV, it must be made available to the public before the securities subscription or purchase period starts, in the case of public offerings, and no later than the time when the admission to listing of the securities takes place, in the case of non-public offerings, both in printed and electronic format through any of the means specified in the applicable regulations.

Prospectuses will be valid for a period of 12 months from their approval to make public offerings or admissions to listing on any Spanish regulated market or in other regulated markets domiciled in the European Union, provided that it is completed and updated, where appropriate, with the appropriate supplements.

According to the Spanish applicable regulations, the liability arising from the information contained in a prospectus referring to a debt securities offering must be ascribed to the issuer.

However, the following persons must be added to the above:

  • The directors and/or managers of the issuer, in the terms established by the corporate applicable legislation.
  • Any persons who expressly accept to assume responsibility for the content of the prospectus, when such circumstance is mentioned in the prospectus.
  • Any person different from the above who has authorised, in whole or in part, the content of the prospectus, when such circumstance is mentioned in the prospectus.

The so called “sale prospectus” and “listing prospectus”

Depending on whether a particular offering of securities is considered to be a public or a non-public offering, a “sale prospectus” or a “listing prospectus” would be required. The content of both prospectuses is the same. The difference between one another is the time when the prospectus must be approved by and registered with the CNMV and, therefore, disclosed through its publication on the CNMV’s website.

Sale prospectus

The obligation to publish a so called “sale prospectus” (ie, a prospectus that must be approved by and registered with the CNMV before the securities can be effectively offered) only applies to “public offerings” (this is, offers of securities to the public). This sale prospectus will, however, serve as well as listing prospectus when the time comes.

According to the provisions of Spanish applicable regulations, an “offer of securities to the public” or “public offering” means a communication to persons made in any form and by any means, presenting sufficient information on the terms of the offering and the securities to be offered, so as to enable an investor to decide to purchase or subscribe for those securities.

Notwithstanding the above, those regulations establish that the obligation to publish a sale prospectus would not apply to the following types of offerings, which, therefore, will not be considered as public offerings:

(a)       An offer of securities exclusively addressed to qualified investors.

(b)       An offer of securities addressed to less than 150 natural or legal persons per European Union Member State, without including the qualified investors.

(c)       An offer of securities addressed to investors who acquire securities for a minimum amount of EUR100,000 per investor, for each separate offer.

(d)       An offer of securities the unit par value of which is not less than EUR100,000.

(e)       An offer of securities where the total consideration of the offer is less than EUR5 million within the European Union, which limit shall be calculated over a period of 12 months.

Regulation (EU) 2017/1129 gives European Union Member States the option to set out the exception threshold referred to in paragraph (e) in their national law between EUR1 million and EUR8 million. The Spanish legislator has opted to maintain its traditional threshold of EUR5 million unaltered so far.

Of the above exceptions, those that are most frequently relied upon in the framework of debt securities offerings in Spain are those indicated in paragraphs (a) and (b).

Those types of offerings will, however, still be subject to the obligation to have a listing prospectus approved by and registered with the CNMV before the securities may be admitted to listing.

Listing prospectus

The publication of a so called “listing prospectus” (ie, a prospectus that must be approved by and registered with the CNMV following the issue and allocation to the investors of the securities offered, purported only for the admission to listing of such already issued securities) will be required for the admission to listing on the AIAF regulated market of the securities issued in the context of any non-public debt securities offering, unless any of the exemptions for the publication of a listing prospectus provided for in the relevant regulations is applicable.

The relevant regulations establish ten different possible exemptions for the publication of a listing prospectus. However, those exemptions mainly refer to equity offerings and, therefore, there is not a particular exemption which may be identified as more frequently relied upon in the framework of debt securities offerings in Spain.

Documentation requirements in the context of the establishment of an issuance programme of debt securities to be listed on the AIAF regulated market

The establishment of an issuance programme of debt securities to be listed on the AIAF regulated market will require the prior presentation, approval and registration with the CNMV and the subsequent publication of a base prospectus containing, in addition to the standard information that must be incorporated in an informative prospectus, specific information about the programme.

The base prospectus must be complemented with the final conditions of the securities that are effectively issued under the programme. The base prospectus must contain a model of final conditions.

See 6.1 The Prospectus or Offering Document.

See 6.1 The Prospectus or Offering Document.

See 6.1 The Prospectus or Offering Document.

See 6.1 The Prospectus or Offering Document.

An issuer contemplating to undertake an offering of debt securities in Spain, together with those of its directors and managers who are aware of the transaction and all the advisers engaged in the transaction, must follow certain rules regarding the marketing or publicity of the transaction, which will normally be included in a set of publicity guidelines prepared by the issuer’s legal counsel.

The following is a non-exhaustive description of the main marketing or publicity restrictions in respect of an equity offering in our jurisdiction:

(i)       Publicity must be clearly recognisable as such and must be sufficient, objective and must not be inaccurate or misleading, and the publicity or advertising purpose of the communication must be explicit and patent.

(ii)       Publicity must state that a prospectus has been published or will be published and indicate where investors may obtain or will be able to obtain such prospectus.

(iii)       Any relevant information disclosed by the issuer exclusively to certain investors, including the information disclosed in the context of meetings related to the offering (eg, the analyst’s presentation), should be disseminated amongst all investors or special categories of investors to whom the offering is addressed and should be included in the prospectus.

(iv)       No message may be disseminated for promotional purposes whose ideas and quantifications cannot be found in the prospectus. All statements should be thoroughly verified and supported by objective data and, to the extent possible, by independent information sources not related to the issuer or the offeror.

(v)       The issuer may continue carrying out advertising, communication and promotional activities to market and sell its products and services in accordance with its past practice before, during and after the offering. However, these advertising, communication and promotional activities should not be mixed with those that may be undertaken in relation to the offering.

Bookbuilding in Spain is an unregulated process which mainly follows international market practice.

Upon the finalisation of the bookbuilding period, the issuer and the underwriters will determine the final price of the offering on the basis of the investors’ indications of interest and allocate the offered securities to those investors who have irrevocably confirmed their subscription proposals.

In line with international market practice, debt securities offerings in Spain, including those offerings conducted through a bookbuilding process, are, as a general rule, underwritten.

Apart from the underwriting commitment, underwriting agreements entered into in relation with Spanish debt securities offerings will normally govern, amongst others, the following key aspects of the transaction:

(i)       The scope and content of the legal opinions to be issued by the issuer’s and the underwriters’ domestic (and, as the case may be, international) legal counsel for the benefit of the underwriters.

(ii)       In the context of issuances of bonds exchangeable for or convertible into shares of the issuer, the terms and conditions of the lock-up agreements on the issuer’s shares to be assumed by the issuer (typically, 180 calendar days following the date of settlement of the offering) and/or the issuer’s selling or significant shareholders, directors and managers (depending primarily on the relevant stake in the issuer’s share capital, between 90 and 180 calendar days following the date of settlement of the offering).

(iii)       The terms and conditions of the non-defaulting underwriters’ commitment to subscribe for the offered securities which a defaulting underwriter fails to subscribe for under its underwriting commitment.

(iv)       Termination events, force majeur and “material adverse effect” clauses.

(v)       The terms and conditions of the underwriters’ prefunding commitment. In the context of Spanish equity offerings or issuances of bonds exchangeable for or convertible into shares of the issuer, in order to expedite the listing of the offered securities, the underwriters (ordinarily, those holding the position of global coordinators) typically subscribe and pay for the offered securities in the name of the final investors.

(vi)       In the context of issuances of bonds exchangeable for or convertible into shares of the issuer, the terms and conditions of the stabilisation transactions to be carried out by the underwriters (ordinarily, one of those holding the position of global coordinator).

With respect to stabilisation transactions referred to in paragraph (vi) above, it is worth highlighting that, pursuant to Regulation (EU) No 596/2014 of the European Parliament and of the Council, of 16 the April 2014, on market abuse (the “Market Abuse Regulation”), any person operating in or involved with the securities markets must refrain from preparing or conducting any actions that may manipulate the market price of any securities. However, the foregoing restrictions shall not be applicable to, amongst others, the stabilisation transactions of a financial instrument, being therefore exempted from the prohibitions set forth in the Market Abuse Regulation, provided that trading thereon is carried out in accordance with Commission Delegated Regulation (EU) 2016/1052, of 8 March 2016, supplementing the Market Abuse Regulation with regard to buy-back programmes and stabilisation measures.

See 8.1 Extent to Which Bookbuilding is Used.

See 8.1 Extent to Which Bookbuilding is Used.

See 8.1 Extent to Which Bookbuilding is Used.

There are no restrictions concerning the use of foreign governing law and/or jurisdiction for issuances in Spain (such as English or New York law).

The choice of law provisions generally incorporated to underwriting agreements (or other transaction documents) entered into in relation to a Spanish offering should be legal, valid and binding under the laws of Spain and we know of no reason why the courts of Spain would not give effect to the choice of English or New York law as the governing law of such underwriting agreements.

According to our experience, we are not aware of any cases where, in the context of a Spanish offering, the choice of a foreign governing law and/or jurisdiction has not been recognised by Spanish courts.

To ensure the legality, validity, enforceability or admissibility into evidence of an agreement in Spain, it is not necessary that such an agreement be filed or recorded with any court or other authority in Spain or that any stamp, registration or similar tax be paid on or in respect of any such document.

A final judgment duly rendered by a foreign court, in response of a legal action filed before such court in connection with the transaction documents would be enforceable in Spain, provided that, when the request to enforce the foreign court judgment in Spain is filed, no material contradiction or incompatibility exists between such judgment and a judgment rendered, or judicial proceedings pending in Spain.

Foreign entities entering into equity transactions or offering their equity securities in Spain are not, from a legal standpoint, subject to any regulatory restrictions different from those which generally apply to companies of Spanish nationality. Please refer to the previous sections of this document for further details regarding the legal regime concerning foreign entities, as well as to 12 Tax below).

See 9.1 Restrictions on the Use of Foreign Governing Law and/or Jurisdiction for Debt Issuances.

See 9.1 Restrictions on the Use of Foreign Governing Law and/or Jurisdiction for Debt Issuances.

See 9.1 Restrictions on the Use of Foreign Governing Law and/or Jurisdiction for Debt Issuances.

See 9.1 Restrictions on the Use of Foreign Governing Law and/or Jurisdiction for Debt Issuances.

See 9.1 Restrictions on the Use of Foreign Governing Law and/or Jurisdiction for Debt Issuances.

See 9.1 Restrictions on the Use of Foreign Governing Law and/or Jurisdiction for Debt Issuances.

The timetable of a debt offering securities issuance for listing on the AIAF regulated market will ordinarily take between five and six months.

The preparation of the prospectus would be by far the most burdensome and laborious duty amongst the items of work which are further described below.

Below is a brief description of the items of work involved in each of the four phases into which a debut standalone debt securities offering would typically be divided:

  • First phase (ten weeks): Structuring of the offering, appointment of advisers, conducting of the legal, financial and business due diligence process, drafting and filing of the first draft prospectus with the CNMV and preparing the marketing materials.
  • Second phase (eight weeks): Conducting the review process of the draft prospectus with the CNMV until approval, the market sounding process, holding of the analyst presentation and publication of analyst research reports and of the approved prospectus.
  • Third phase (two weeks): Conducting the roadshow and bookbuilding process, pricing and underwriting agreement’s execution and filing of the corresponding administrative listing applications.
  • Fourth phase (four weeks): CNMV’s positive verification of compliance with the necessary requirements for the admission to listing, approval of the admission to listing by the managing entity of AIAF, closing and settlement of the offering, commencement of effective trading on AIAF, and, where applicable, conduction of the stabilisation process by the underwriters.

In the case of a repeat standalone issuance, if admission to listing of the debt securities to be issued under the repeat standalone issuance takes place on a date which is less than 12 months later than the registry date of the registration document of the prospectus used for the admission to listing of the debt securities issued under the preceding standalone issuance, the prospectus’ related workstreams would be significantly reduced, because only a securities note containing the terms and conditions of the securities to be issued under the repeat standalone issuance would be required by the CNMV, instead of a complete new prospectus. In addition to the foregoing, the maximum standard deadline of 20 business days for the CNMV to review the prospectus (or, as the case may be, the securities note) would be reduced to a maximum period of ten business days.

Finally, in the case where a programme base prospectus has been already approved and registered with the CNMV, the issuer will only be required to file the final conditions (mainly, the final pricing information and the number of securities to be issued) at the time of launching the offering.

As indicated in section 1 “Debt Markets/Exchanges” above, Iberclear is the BME group entity which acts as the central securities depository in Spain in charge of both the registry of securities represented in book-entry form and the clearing and settlement of all the transactions carried out on securities admitted to listing on Spanish securities markets, including the AIAF regulated market.

Iberclear is connected to the technical platform TARGET2 (“T2S”). The registration and settlement of debt (and equity) securities is carried out through the "ARCO" platform, which operates under the simultaneous delivery versus payment criteria, with settlement in T+2.

As already explained under section 2 “Regulatory and legislative framework” above, trading of the securities in AIAF takes place in euros (“EUR”).

See 11.1 Clearing & Settling Debt Securities.

There are no specific main tax issues to be considered when issuing and listing debt securities in Spain. All tax issues are to be properly described and dealt with in the tax section of the relevant prospectus.

Under Spanish domestic legislation, provided that the requirements and formalities set forth in Additional Provision One of Law 10/2014 and development tax regulations are fulfilled, including that the debt securities are admitted to listing in a regulated market, multilateral trading facility or other organised market, interest payments corresponding to listed debt securities issued by Spanish issuers are not subject to withholding tax (“WHT”). Repayment of principal is not subject to WHT.

In addition to the above, no taxes are triggered on the issue or transfer of listed or unlisted debt securities.

Finally, income obtained by non-resident holders on the disposal of listed debt securities issued by Spanish issuers that comply with the above–mentioned requirements and formalities are not subject to taxation.

If unlisted, such income will be subject to taxation at 19% unless reduced or eliminated by the application of a tax treaty. If taxable, the capital gain must be reported and paid voluntarily by the non-resident holder.

See 12.1 Main Tax Issues When Issuing & Listing Debt Securities.

See 12.1 Main Tax Issues When Issuing & Listing Debt Securities.

See 12.1 Main Tax Issues When Issuing & Listing Debt Securities.

Issuers of debt securities admitted to listing on a regulated market located in the European Union that have Spain as their home Member State must register with the CNMV and make available to the public the following information through its incorporation into their corporate websites:

(a)       except where the debt securities have a unit value which is not less than EUR100,000, their audited annual financial statements and their semi-annual financial information (which may not be audited if they do not have an obligation to have it audited); and

(b)       any inside information linked to the issuer or the debt securities.

In addition to the above, the issuer’s directors and key managers must inform the issuer and the CNMV of any transaction they carry out on issuer’s securities.

See 13.1 Continuing Obligations Applicable to Listed Debt Securities.

See 13.1 Continuing Obligations Applicable to Listed Debt Securities.

See 13.1 Continuing Obligations Applicable to Listed Debt Securities.

DLA Piper Spain

Paseo de la Castellana 35,
28046 Madrid,
Spain

+34 91 319 1212

+34 91 319 1940

inigo.gomez-jordana@dlapiper.com www.dlapiper.com
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DLA Piper Spain has a capital markets team in Madrid comprised of seven senior capital markets specialists, who are supported by junior lawyers from the general corporate area (comprised of 25 lawyers). The firm is a global legal services organisation with over 4,200 lawyers located in more than 30 countries. The global capital markets group is based in London and works closely with experienced capital markets lawyers in DLA Piper's offices across Europe, the Middle East, Africa, the USA and Asia. The practice group comprises more than 175 lawyers worldwide and offers integrated securities advice on complex, cross-border transactions requiring support under different laws. The firm’s lawyers advise issuers, underwriters, selling shareholders, sponsors, arrangers, lead managers, originators, dealers, trustees and depositaries on a broad range of securities offerings, including equity, equity-linked and debt securities, as well as structured and project financings and securitisations.

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