For the first time: NSSMC registered the issuance of credit notes

On June 7, the NSSMC (National Securities and the Stock Market Commission) adopted a Resolution regarding the registration of the issue of series A credit notes of the limited liability company «MARKET CONSULT PLUS». This type of security is registered by the regulator for the first time in response to the issuer’s request. The registration of the issuance of credit notes took place within the framework of the pilot project.

«A credit note is an emission derivative security that is associated with the occurrence of an event related to the solvency of a third party specified in the Resolution on the issuance of credit notes. Since there is a request from the issuer, as well as the interest of potential participants in this instrument, the NSSMC approved a pilot project regarding the Procedure for the issuance and registration of the issuance of credit notes by MARKET CONSULT PLUS LLC. We hope that the first experience will be successful and the results will contribute to the popularization of credit notes to attract the necessary resources. The NSSMC is always ready to support the initiatives of the participants and promotes the entry of new financial instruments into the market», said Ruslan Magomedov, the Chairman of the NSSMC.

The NSSMC registered the issue, which includes 334,000 nominal interest-bearing ordinary (unsecured) credit notes for the total amount of UAH 334 million, with a nominal value of one credit note of UAH 1,000. The interest rate is 5% per annum, the term of circulation is 5 years. Third Party Event: Bankruptcy of such third party.

The credit note obliges the issuer to pay interest income to the owner of such security in the amount and terms established by the decision on the issue of credit notes. Redemption occurs by the issuer paying the owner of the nominal value of the credit note, provided that no event related to the solvency of the third party specified in the decision on the issue of credit notes has occurred. In the event of the occurrence of an event related to the solvency of the third party specified in the issuance decision, the owner of the credit note loses the right to receive interest income, and the issuer of the security is obliged to buy back the credit note at a price determined in accordance with the procedure provided for in the Resolution on emission.