The purpose of this memorandum is to provide information on the
process for listing payment in kind notes ("PIK
Notes"), also known as funding bonds, on The
International Stock Exchange Authority Limited (the
"TISEA"). This memorandum is also
relevant to the listing of further principal loan notes which are
fully fungible with the existing loan notes (ie they form a single
series/the same class as the existing loan notes) if the issue of
such securities was pre-empted during the initial listing
application stage.
Walkers Capital Markets Limited ("WCML")
is a Category 1, 2 and 3 sponsor of TISEA, which means that we are
able to act as a sponsor for all listing purposes, enabling all
clients to achieve their goals. We are experienced in the provision
of high quality and cost effective professional legal and listing
services.
PIK Notes may be issued to satisfy interest payments. In these
circumstances the PIK Notes are simply loan notes, usually in the
same form as the existing loan notes, which are issued to the
existing Noteholders for an amount equal to the amount of accrued
interest.
Subject to a number of exceptions, a UK tax paying company is
obliged to withhold tax from payments of interest. As TISEA has
been designated as a recognised stock exchange under section 841 of
the Income and Corporation Taxes Act, 1988 and section 1005 (1) of
the Income Tax Act (2007), qualifying debt securities listed on
TISEA are eligible for the Quoted Eurobond Exemption which allows
an issuer liable to pay UK tax to make payments of interest on the
listed securities gross, without deduction of withholding tax.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
