Listing of Green Bonds on the Emerging Companies Market (ECM) of the Cyprus Stock Exchange (CSE) is drawing significant interest from companies and investors alike. This interest is driven by the growing global emphasis on sustainability and the increasing demand for environmentally responsible investment opportunities. Green bonds, in particular, offer a unique combination of financial returns and positive environmental impact, making them highly attractive in today’s market.
Green bonds
Unlike conventional bonds, Green bonds are specifically devoted for projects combating the climate crisis and promoting environmentally friendly initiatives.
Green bonds are securities designed to raise capital solely for projects aligned with environmental goals. This means that the funds raised through Green bonds can only be used to finance projects that contribute positively to the planet. Whether it’s renewable energy projects, sustainable infrastructure, or initiatives to mitigate climate crisis, the issuer of Green bonds commits to directing these resources towards a greener, more sustainable future.
General Listing Requirements
- For a bond to be listed, the issuing entity must be a public company, legally incorporated and operational, with the power to issue the specific securities to the public, for which the application is made, to the public.
- The application for listing should encompass all securities of the same class that have been issued or are anticipated to be issued, including any rights or financial derivatives that can be converted into securities of the same class to be listed.
- In the event that the issuer already has securities listed on either a regulated or non-regulated market, pertaining to rights or financial derivatives that can be converted into securities of the same category as those to be listed, the CSE may exclude these securities from the listing. However, if these securities are converted into securities of the same category as those to be listed, the new securities must also be listed on the CSE.
- The issuer must propose the listing of securities whose transfer is free.
- Equal treatment of all beneficiaries of securities within the same category must be ensured by the issuer.
- The issuer must guarantee that any future issuances will be offered proportionally, initially to existing holders.
- The issuer must have a minimum of two directors, with at least one serving as an executive director.
Special Listing Requirements
- The total value of the bonds to be issued must be greater than EUR200,000.
- If the bonds are converted or exchanged into shares or options, these shares must be listed on the CSE or a recognised stock echange.
- A competent person shall be appointed as trustee for the protection of the interests and rights of the holders of the bonds. The appointed trustee shall preferably be a legal entity.
- For the listing of bonds in the ECM of the CSE, the requirement to prepare audited financial statements is not applicable.
- The issuer shall determine whether its securities will be traded under conditions of clean price or dirty price.
- The issuer shall publish a legally binding Trust Agreement which shall be amended only with the consent of the beneficiaries holding 75% of all bonds. The Trust Agreement shall include the following provisions:
- rights and obligations of the issuer against the beneficiaries;
- the relation between the rights of the beneficiaries and the rights of the beneficiaries of other securities and bonds of the same issuer or other issuer on whom the issuer or its capital depends;
- the reserves, the procedure of repayment or other provisions relating to the amortisation of the debt;
- in the case of bonds whose repayment or partial repayment is guaranteed by a third party, a copy of the decision or of the document providing the guarantee; and
- the name or names of the representatives or trustee for the representation and protection of the interests of the beneficiaries, the terms of replacement and his responsibilities.
LISTING DISBURSEMENTS FOR GREEN BONDS
The CSE made special arrangements in its pricing policy to encourage green bonds to be listed on the CSE:
| Application fee: | EUR 1,100.00 |
| Listing fee: | EUR 1,000.00 (initial registration fee) |
| Annual fee: | EUR 1,500.00 (for up to EUR 10mil)
or EUR 4,500.00 (for EUR 40 mil – EUR 100 mil) |
| Registry fee: | EUR 3,000.00 – 10,000.00 (this calculation will be based on the total value deriving as the product of the nominal value of bonds times the number of bonds) |
GREEN BOND CERTIFICATION
A certification shall be obtained by the Issuer of the green bond.
The objective of the green bond certification is to ensure that the bond issued is in line with the goals of the Paris Climate Agreement, which aims to limit global warming to 1.5℃.
This dual purpose of generating capital while driving positive change makes Green bonds an increasingly attractive option for investors looking to align their portfolios with sustainability.
For the listing of bonds on the ECM of the CSE and trading of these securities, it is a prerequisite for the issuer of the securities to appoint a Nominated Advisor.
LLPO Law Firm, holder of a specialist accreditation and license from the CSE as a Nominated Advisor (NOMAD) for the ECM is here to offer expert guidance and support every step of the way.
Contact us now and we would be happy to provide further assistance and expert guidance on this matter.
Disclaimer
Disclaimer
The content of this article cannot be considered as a legal advice. For any further information or advice on the particular matter, we strongly recommend that you contact us to be guided accordingly.
