Nasdaq First North Bond Market
Nasdaq First North Bond Market is an alternative marketplace and as such an “unregulated marketplace”. This means that Nasdaq First North Bond Market can offer issuers more flexible admission requirements than the Regulated Markets.
Nasdaq First North Bond Market complements the Regulated Markets. Some issuers will have great benefits from a more efficient and lean admission process on Nasdaq First North Bond Market whereas other issuers find that their investors require admission on a regulated market.
On Nasdaq First North Bond Market bonds can be admitted to trading without an FSA approved prospectus. Furthermore, on the Regulated Markets issuers must comply with IFRS accounting standards. This is not the case for issuers on Nasdaq First North Bond Market.
Organized as an MTF in Sweden and Finland, and as an Alternative Marketplace in Denmark.
Benefits for Corporate Bonds
The most common reason for issuing bonds is the need for capital, both event based such as acquisitions etc. but also as an alternative to other types of capital, primarily instead of traditional bank financing. Nordic companies are increasingly funding themselves via corporate bonds as an alternative to traditional bank financing. The benefits of corporate bonds are primarily:
- Possibility for longer maturities
- Fixed interest rates and bullet loans – no amortization
- Reduced dependency of banks
- Less detailed terms compared to bank loans
- Increased leverage a possibility
- Transparency in secondary market pricing
- Limited legal fees
The main admission requirement is a Company Description, describing the issuer and the terms and conditions of the issued bond(s). Also, the bonds shall be freely negotiable so no restrictions in trading or ownership can be accepted.
Issuers must engage a Certified Adviser during the admission process, unless the issuer already has securities admitted to trading on First North or a Regulated Market. The Certified Adviser will be able to advise and assist the issuer in this process.
For issues of bonds denominated in lot sizes of less than 100.000€, there is an additional requirement for two years of financial history and they are also obliged to ensure, as a minimum, continuous bid prices by way of a Liquidity Provider.
On Nasdaq First North Bond Market bonds can be admitted to trading without an FSA approved prospectus. Typically, bonds that are denominated in lot sizes of €100.000 or more can be exempt from the requirement to draw up a prospectus. If an issuer is not obliged to draw up a prospectus in relation to the admission to trading, the issuer must publish a Company Description. This document contains some of the same elements of a prospectus, but is often much less detailed and thus requires significantly less resources. The Company Description is approved by the exchange and not the local FSA. Issuers whose securities are already admitted to trading on First North or a regulated market is exempt from parts of the Company Description, in essence only requiring it to describe the terms and conditions of the bonds.
Currency and Languages
Bonds on First North Bond Market can be admitted to trading in most currencies, e.g.
The issuer can choose to disclose Information in English, Swedish, Danish, Norwegian, or Finnish depending on the relevant First North Bond Market.
The disclosure rules on First North are similar to those of our Regulated Market. The general rule is that all “significantly price sensitive information” must be disclosed to the market. But as a minimum, issuers must always disclose:
- Annual accounts and a semi-annual report
- Qualified auditors’ report
- Resolutions adopted by the general meeting of shareholders or by a bondholders meeting
- Changes in management, certain advisers, etc.
Issuers are always welcome to call our surveillance department for guidance in these types of questions.
The annual report shall be prepared in accordance with applicable laws, regulations, and generally accepted accounting principles in the company’s home country.
Bonds admitted to trading on Nasdaq First North Bond Market are trading in Genium INET, Nasdaqs trading system also used for the regulated fixed income markets. All members of Nasdaq’s regulated fixed income markets have access to trading on NasdaqFirst North Bond Market.
The system offers increased transparency by electronic execution, indicative pricing and trade publication services.
All issuers of bonds admitted to trading on Nasdaq First North Bond Market must engage a Certified Adviser in connection with the admission process. The Certified Adviser can as an example be an investment bank, a corporate finance firm, or an accounting firm. All Certified Advisers are approved by Nasdaq.
The Certified Adviser’s obligation is to guide the company through the admission process until the first day of trading. The Certified Adviser’s responsibility is to support the company in these tasks. The Certified Adviser will support the issuer’s effort to continuously comply with the rules and regulations on Nasdaq First North Bond Market.
The issuer must enter into a written agreement with the Certified Adviser. This agreement regulates the requirements and obligations of the Certified Adviser towards the company in question. The Certified Adviser plays an important role for issuers of bonds admitted to trading on Nasdaq First North Bond Market, therefore the importance of choosing a qualified Certified Adviser is essential.
- List of Certified Advisers