The issuance of bonds of the 1^st special entity of project finance in Russia (2019)

Federal law “On securities market” provides for an opportunity of project finance using money from a capital market via an SPV, i.e. a special entity of project finance.

The task: to register an issuance documentation to place the bonds of a special entity of project finance. The raised money was intended to be given as loans to finance investment projects. The bonds must be secured by the pledge of claims to borrowers of syndicated loans and by a state guarantee.

A simplified structure of the transaction is below:

The solution of the case involved the following stages.
1. Preparation of a term sheet.
2. Registration of the special entity of project finance.
3. Drafting of the issuance documents (a bond programme, a prospectus).
4.Partaking in negotiation of conditions of the state guarantee.

The bond programme of the 1^st special entity of project finance in Russia was registered by the Bank of Russia.

The instrument is relevant for entities planning to raise investments into project via issuance of bonds with the help of an SPV.