Listing Private Equity Acquisition Debt on The International Stock Exchange (TISE)
This article provides an introduction to listing private equity acquisition debt on The International Stock Exchange (TISE) as well as a summary of Appleby’s listing agent services in the Channel Islands.
Appleby Securities (Channel Islands) Ltd (“Appleby”) and The International Stock Exchange (TISE) work together on a significant number of listings of debt securities on TISE.
DEBT SECURITIES FOR PRIVATE EQUITY
Many of these debt securities are issued as part of private equity backed acquisitions. They relate to the financing of UK businesses, and are listed on the Qualified Investor Bond Market at TISE.
In summary, an issuer within an acquisition stack will issue loan notes to a private equity house, the management teams and/or other intragroup entities. These loan notes may be convertible or secured and are issued under English law governed finance documents. Appleby works closely alongside English lawyers and advisors, in order to list the loan notes on TISE.
“Quoted Eurobond Exemption”
The listed loan notes are classified as “Quoted Eurobonds”. Ordinarily, a UK issuer may need to withhold tax from interest payments. However, as TISE is a stock exchange recognised by Her Majesty’s Revenue and Customs (HMRC) under English law, “Quoted Eurobonds” listed on TISE can benefit from the “Quoted Eurobond Exemption”. This can allow the issuer to make interest payments on the loan notes without the deduction of any withholding tax.
TISE is currently seeing record listing volumes and it is the second year in a row that it has announced record figures. In the first quarter of this year TISE has also launched its new bespoke Nova trading system.
Whilst offering a “Recognised Stock Exchange” for the purposes of UK HM Revenue & Customs, TISE’s robust but proportionate listing rules, combined with TISE’s pragmatic and commercial approach to listings, often appeals to issuers from the United Kingdom, Europe, the United States and Asia.
LISTING SPONSOR SERVICES
Appleby is a leading listing agent with TISE, which listed 1,111 securities during 2021 against the backdrop of the coronavirus (COVID-19) global pandemic. This is the highest annual total of new listings since the inception of TISE, and Appleby acted as listing agent on an increasing number of these listings, representing a 93% increase on 2020.
Appleby assists domestic and international entities looking for a primary or secondary listing on TISE. Our listings team is committed to delivering a highly professional and integrated service, coordinating the listing process, and supporting the issuer through their application. We also act as our client’s ongoing listing agent and assist them in meeting their continuing obligations as a listed issuer on TISE.
THE INTERNATIONAL STOCK EXCHANGE
TISE is a regulated marketplace from within the European time zone but outside the European Union. TISE is a “Recognised Stock Exchange” by UK HM Revenue & Customs. Today there are more than 3,500 securities listed on TISE with a total market value of more than £500 billion. The majority of listings on TISE are for debt securities (including High Yield Bonds and Quoted Eurobonds) but TISE can also list other types of securities, such as REITs, Sustainable Bonds, Securitization Bonds, SPACs, other investment vehicles and equity listings.
For more information on our expertise related to our listings services please do not hesitate to get in touch with your usual Appleby contact.
What is the Quoted Eurobond Exemption?
The Quoted Eurobond Exemption is an exemption that allows the issuer to make interest payments on the loan notes without the deduction of any UK withholding tax. Quoted Eurobonds listed on The International Stock Exchange (TISE) can benefit from this exemption.
