Bonds and Right Instruments
Bonds and various right instruments (such as rights offerings, warrants, options, and convertible securities) are sophisticated financial products that play a crucial role in corporate finance, enabling companies to raise capital and investors to access diverse opportunities. In Saudi Arabia, the development of a deep and liquid debt capital market, alongside robust equity markets, is a key objective of the Financial Sector Development Program under Vision 2030. Issuing, investing in, or restructuring these instruments involves navigating a complex web of legal and regulatory requirements, primarily overseen by the Capital Market Authority (CMA) and governed by its comprehensive rules
Whether you are an issuer seeking to raise capital or an investor considering these instruments, specialized legal counsel is indispensable for:
Ensuring Regulatory Compliance:
Adherence to the CMA's Rules on the Offer of Securities and Continuing Obligations, specific regulations for debt instruments, and Tadawul listing rules is mandatory for public offerings and listed instruments. Legal experts guide clients through these intricate requirements.
Structuring Complex Instruments:
The terms and conditions of bonds (both conventional and Shari'ah-compliant Sukuk) and right instruments can be highly complex. Legal counsel is vital for structuring these instruments effectively to meet the issuer's objectives while being clear and fair to investors.
Drafting Robust and Compliant Documentation:
Accurate and comprehensive legal documentation (such as prospectuses, offering circulars, trust deeds, subscription agreements, and term sheets) is fundamental to any offering and for defining the rights and obligations of all parties.
Managing Transactional Processes:
Legal advisors manage the legal aspects of the issuance process, rights offering procedures, conversion mechanisms for convertible securities, and any necessary regulatory filings and approvals
Protecting Investor Rights:
For investors, legal counsel can assist in understanding the terms of the investment, conducting due diligence on the offering, and advising on their rights and potential remedies
Navigating Restructurings:
In situations requiring the restructuring of debt instruments, expert legal advice is crucial for negotiating with stakeholders and implementing viable plans in compliance with applicable laws, including the Bankruptcy Law where relevant.
The Saudi capital market continues to evolve, offering increasingly sophisticated financing tools. Expert legal guidance ensures that participants can leverage these opportunities while managing associated legal and regulatory risks effectively
SHP Law offers specialized legal services in the area of bonds and various right instruments, providing expert guidance and robust support to issuers, investors, and other market participants seeking to navigate these complex financial products within the Saudi Arabian legal framework. We provide a comprehensive approach to the legal strategy underpinning these instruments, ensuring each client clearly understands the legal implications and options available to them.
Our bond services are designed to provide comprehensive legal support for diverse debt financing transactions, ensuring clarity, compliance, and the achievement of our clients' strategic financial objectives. We advise on both conventional bonds and Shari'ahcompliant Sukuk.
Our services include:
Bond and Sukuk Issuance:
Advising issuers (corporates, financial institutions, and government-related entities) on all legal and regulatory aspects of issuing bonds and Sukuk. This includes structuring the offering, preparing the prospectus and other core documentation (e.g., trust deeds, agency agreements), negotiating with underwriters, arrangers, legal advisors to other parties, and investors, and managing the CMA approval and Tadawul listing process.
Advising Investors in Bond Transactions:
Representing institutional and sophisticated investors in bond and Sukuk transactions, including conducting legal due diligence on offerings, reviewing and negotiating investment terms, and advising on ongoing regulatory compliance and bondholder rights.
Bond Restructuring:
Assisting issuers and bondholders with bond restructuring transactions, including negotiating with diverse groups of bondholders and other creditors, developing and implementing restructuring plans (including consent solicitations and exchange offers), and advising on relevant insolvency and bankruptcy law implications.
Our services for right instruments provide expert legal guidance and support to help issuers raise capital and to assist investors in understanding and exercising their rights related to these equity-linked securities. We work closely with our clients to ensure that the legal structuring of these instruments is customized to their specific needs and strategic goals.
Our services include:
Rights Offerings (Priority Rights Issues):
Advising listed companies on all aspects of rights offerings to existing shareholders, including structuring the offering in compliance with CMA rules, drafting the offering documents (including the prospectus or investment memorandum), managing the subscription process, and coordinating with Tadawul.
Warrants and Options:
Providing legal advice on the structuring, issuance, and exercise of warrants and options, including drafting and negotiating warrant agreements and advising on compliance with relevant CMA regulations and corporate law.
Convertible Securities:
Advising on the issuance of convertible securities, such as convertible bonds and convertible preferred stock. This includes structuring the conversion features, drafting the relevant documentation, ensuring compliance with CMA and corporate requirements, and assisting with the legal aspects of the conversion process into equity
At SHP Law, we combine our deep knowledge of capital markets law, CMA regulations, and Tadawul procedures with a pragmatic and commercially astute approach to deliver effective legal solutions for our clients involved with bonds and right instruments in Saudi Arabia.