AN INDUSTRY NEWSLETTER FROM THE GLOBAL LISTINGS TEAM | APRIL 2021
CAYMAN ISLANDS
Cayman Islands Stock Exchange Update
JERSEY, CHANNEL ISLANDS
The International Stock Exchange Update
IRELAND
Euronext Dublin Update
LUXEMBOURG
The Luxembourg Stock Exchange Update
2 | LISTed
Cayman Islands Cayman Islands Stock Exchange Update1 Last year, the Maples Group once again secured the top spot as the number 1 listing agent on the Cayman Islands Stock Exchange (the “CSX”) having advised on 53% of all CSX listings in 2020 (an increase from 47%, which made us the number 1 listing agent in 2019). There were 505 listings on the CSX in 2020 with the listings of specialist debt securities remaining the largest proportion of new listings, including CLO and repackaging issuers, aircraft ABS and synthetic securitisations with the listing of PPNs remaining strong. Despite the uncertainty brought on by COVID-19, the CSX recorded a healthy number of new listings in 2020, clearly demonstrating the CSX’s ability to provide a proportionate regulatory environment for fast and efficient access to financial markets through a streamlined and cost efficient listing of a wide range of securities for a variety of issuers and jurisdictions. We have seen a rise in the number of potential issuers looking to list innovative and novel structures on the CSX in part due to its responsive and commercial approach. The Maples Group is pleased to be the number 1 listing agent again in 2020 and to be able to offer CSX listing services from our various international offices for the timezone convenience of our clients. In 2020, the CSX reinforced its position as a leading platform on which to list CLOs. Despite a challenging year marred by the global pandemic, the CSX recorded a total of 505 new listings during 2020 (a decrease from the 605 new listings recorded on the CSX in 2019). Specialist debt securities, including CLOs, represented the largest proportion of new listings during 2020 (80%), helping to increase the market capitalisation for all securities listed on the CSX by US$31 billion to over US$459 billion by year end. 1
57 CLO issuers listed on the CSX in 2020 (an increase from the 54 CLO issuers listed on the CSX in 2019), comprising BSL and MM new issuances, refinancings and resets. Of the 57 CLOs listed, 98% were by Cayman Islands issuers with a Delaware co-issuer. Our Cayman Islands office listed 54% of all BSL / MM CLOs listed on the CSX and 53% of all products listed on the CSX in 2020 to maintain our position as the number 1 CSX listing agent. As at 31 December 2020, there was a total of 211 CLOs listed on the CSX. The CSX, as a non-EU exchange, continues to be highly regarded in the market as a practical and efficient alternative for CLO listings where investors do not require a European nexus. Listings of investment funds under Chapter 9, also showed strong growth in 2020 with such fund listings accounting for 5% of CSX listings last year [(up from 2.19% in 2019)]. Many investors participating in the Qualified Domestic Institutional Investor Scheme (the “QDII”), which permits certain qualifying domestic Chinese investors to invest directly in overseas capital markets, specifically look to invest in Cayman Islands funds listed on the CSX. Such Cayman Islands funds are viewed as an attractive investment for QDII investors and the CSX listing is a key element in assisting the investor with meeting the QDII regulation criteria.
Source: The Cayman Islands Stock Exchange Listing Agent Update 2020
#
1
Listing agent on the CSX Maples Group
505 New listings on the CSX in 2020
80
%
of new listings were Chapter 8 specialist debt
We have seen the growth in ESG issuances through many of our clients and have worked on a number of recent ESG transactions. As a listing agent for the CSX, we have been pleased to note the introduction of the Clean Technology (CleanTech) market segment offering a new alternative to traditional exchanges. The CSX has already attracted listings by companies involved in the production of renewable energy and environmentally friendly biotechnology. A listing on the CleanTech segment of the CSX, as an internationally recognised stock exchange, can assist with the marketing and general ESG credentials of a bond issuance as well as enabling access to certain institutional investors, including pension funds, as well as providing a withholding tax exemption for certain issuers. Further information on Global Listings and ESG is available in our December briefing here.
For further details, please contact:
Amanda Lazier +1 345 814 5570 amanda.lazier@maples.com
Scott Macdonald +1 345 814 5317 scott.macdonald@maples.com
Jonathan Caulton +44 20 7466 1612 jonathan.caulton@maples.com
April 2021 | 5
Jersey, Channel Islands The International Stock Exchange Update The International Stock Exchange (“TISE”) saw a dramatic increase in the listing of debt securities during 2020 (an increase of approximately 154% in classes of securities listed year-on-year to December 2020). Much of this debt has been issued in connection with downstream private equity transactions. Typically, the debt-issuing entity will be a UK tax resident company formed in connection with a private equity funded acquisition. Private equity sponsors are increasingly looking at TISE for listings of intragroup debt as an attractive alternative to certain solutions which have been used in the past. For further detail on the key TISE issues for private equity sponsors, see here. As a non-EU exchange, TISE continues to list large volumes of High Yield Bonds issued by a mix of public and private European / US corporates as well as other structured debt issued by, for example, Irish s110 companies and Luxembourg multi-compartment securitisation vehicles. Full details of the Maples Group TISE listing service are available on request.
TRANSACTION TRANSACTION TYPES 2020 TYPES 2020
Securitisation
4%
Other Transactions
24%
19%
Paul Burton +44 1534 671 312 paul.burton@maples.com
53% Anna Cochrane +44 20 7466 1639 anna.cochrane@maples.com
High Yield Bond
Private Equity Backed
6 | LISTed
Ireland Euronext Dublin Update It is now over three years since Euronext Dublin came into being, when the Irish Stock Exchange joined the Euronext Group to become the group centre of excellence for debt, fund and ETF listings. In terms of bond listings, there is a very impressive number of over 42,000 bonds listed on Euronext Dublin. Euronext Dublin run two markets: the regulated market, which is for Prospectus Regulation compliant listings; and the Global Exchange Market (the “GEM”), which is an exchange regulated market. For the regulated market, we can see from the European Securities and Markets Authority’s (the “ESMA”) most recent figures that in 2019 nearly 24% of all debt prospectuses across the EEA (either standalone or base prospectuses) were approved by the Central Bank of Ireland. We see that nearly half of these were for asset-backed deals, which indicates that the vast majority of such listings in Europe take place in Ireland. The bulk of these listings are repackaging trades, securitisations such as RMBS and other structures such as ETCs. We have also seen a very significant number of corporate and bank programmes and standalone issuances opt for a listing in Ireland. This has been a steady accumulation over a number of years and we see a large number of Scandinavian, Iberian and Italian companies and banks in particular as well as many sukuk deals. Many major global banks would also have programmes approved for listing in Ireland, on either the regulated market, the GEM or both. A listing on the GEM is preferred by many issuers due to the very commercial approach of Euronext Dublin, a set of easily understood rules and for some, also the fact that the listing document need not be made available online.
Over
42,000 bonds are listed on Euronext Dublin
The single biggest number of standalone listings on the GEM is repackaging trades Euronext has in excess of 420 ESG bonds
April 2021 | 7
In the past few years, we have seen all new or refinancing CLOs opt for a GEM listing when, in the past, the majority of European CLOs would have opted for a regulated market listing. By volume, the single biggest number of standalone listings on the GEM is repackaging trades and the additional flexibility of the GEM rules makes this quite a straightforward process in most cases. We see that CMBS trades have favoured the GEM over recent years and other types of securitisations such as credit card receivables, auto loans and RMBS commonly list on the GEM. The GEM has a specific set of Subsidiary Guarantor rules to cater typically for the high yield issuers who issue from within a group structure with a mix of guaranteeing and non-guaranteeing subsidiaries. Euronext Dublin have attracted a number of banks to list off their structured bond programmes and this has really driven the volume of issuances in recent years. For ESG bonds, Euronext have a common approach across all of their markets and there is a dedicated section called Euronext ESG Bonds. There is no additional cost for being part of this section and there are in excess of 420 ESG bonds from 150 issuers. The process of joining the section is quite straightforward once the issuer has the appropriate independent third-party external review and commits to ongoing reporting, typically which can be as simple as providing a link to the appropriate section of the issuers website.
For further details, please contact:
Ciaran Cotter +353 1 619 2033 ciaran.cotter@maples.com
8 | LISTed
Luxembourg The Luxembourg Stock Exchange Update The Luxembourg Stock Exchange (“LuxSE”) has a long history, having over 50 years’ experience in listing debt securities and it has had something of an early mover advantage with established issuers. We see that it has a particular focus on the high volume bank debt and derivative programmes and issuances by means of Final Terms and Pricing Supplements. It has been very popular with corporates and with sovereign and supranational issuers. There are over 37,000 securities listed there with more than 10,800 listings in 2020 alone.
There are over
37,000
securities listed on LuxSE with more than
10,800
listings in 2020 alone
Their Prospectus Regulation compliant market is called the Bourse de Luxembourg (“BdL”) and their exchange regulated version is the Euro MTF. An alternative that they have developed is the Securities Official List (“SOL”). The key difference is that, while the securities are listed on the SOL, they are not deemed to be admitted to trading. This allows them to have a very streamlined registration process but it is not a market that will necessarily suit all issuers who may need to have their securities deemed to be admitted to trading. The Luxembourg Green Exchange (the “LGX”) was established in 2016 and has been a very successful venture, noting over 900 securities displayed on it. It does not constitute an additional market and is for issuers who have already listed or registered their bonds or funds on the Euro MTF, the BdL regulated market or the SOL and who seek to invest in green, social or sustainable projects. The LuxSE team evaluates whether the eligibility criteria are met and no additional fees or filing are required from the issuer once it is listed to be displayed on the LGX. Once displayed, issuers of labelled green bonds, social bonds, sustainability bonds or sustainability-linked bonds must provide information about where the proceeds from their bond will be allocated and which classification framework is applied. An external review of the bond from a third-party expert is required and will be published to ensure transparency. The issuers must provide straightforward and relevant reporting on an ongoing basis.
LuxSE is the world’s leading exchange for sustainable securities approximately half of the world’s listed green bonds are displayed on LGX
For further details, please contact:
Ciaran Cotter +353 1 619 2033 ciaran.cotter@maples.com
Arnaud Arrecgros +352 28 55 12 41 arnaud.arrecgros@maples.com
Our highly experienced listing agent team has encountered all of the issues which arise in achieving a listing and can add significant value to the process as a result. Please visit our website here for further information on our offering.
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