CMB published the Draft Communiqué on Debt Instrument Holders Board

In accordance with Article 31/A of Capital Markets Law No. 6362, Capital Markets Board of Turkey ("CMB") published the Draft Communiqué on Debt Instrument Holders Board No. III-31/A.1 dated 22 April 2020 ("Draft Communiqué"). CMB expects all the related authorities, entities and parties to share their comments and suggestions regarding the Draft Communiqué with CMB until 15 May 2020.

A brief summary of the crucial issues regulated under the Draft Communiqué is provided below.

  • Draft Communiqué is only applicable for the domestic issuances in Turkey and does not include the issuances taking place out of the territory of Turkey.
  • Debt Instrument Holders Board ("DIHB") is defined under 2 (two) different categories named as Tranche DIHB and General DIHB.

  • Tranche DIHB is the board composed of debt instrument holders with debt instruments issued

    through one or several tranches, which may convene upon the invitation of the issuer or the respective debt instrument holder(s) for the purpose of agreeing upon the prospectus/issuance certificate amendments that impact the investors' decision.

    General DIHB is the board voluntarily composed of debt instrument holders of other tranches who believe that Tranche DIHB decisions have negative impact upon them and disagree with such decisions.

  • DIHB decision is required to be taken for any kind of amendment in relation to the maturity, interest, capital and such other primary terms and conditions of the prospectus/issuance certificate that will have an impact on investors' decision.
  • The principles for convention of Tranche DIHB and General DIHB, physical or electronic meetings and decision quorums are regulated under the Draft Communiqué. The templates for attendance list, meeting minutes and power of attorney in relation to the DIHB meetings are attached to the Draft Communiqué as well.
  • Separate DIHB shall convene for secured and asset backed debt instruments' holders.
  • The debt instrument holder may assign a debt instrument representative for the related DIHB meeting. The decision quorum for assigning such representative and the representative's qualifications are set forth in the Draft Communiqué.
  • The events of default in the payment obligations of the issuer shall be explicitly written in the respective prospectus/issuance certificate.
  • In case of any default in the repayment of the debt instrument and following that, if the terms of such debt instrument is restructured, for application of the changed terms, all the lawsuits and execution proceedings filed due to such default will suspend, the preliminary injunction orders and precautionary attachments will not be enforced, the lapse of time and prescription period will not be applicable.
  • Draft Communiqué is applicable for the issuances after the date of 25 February 2020.

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.