Debenture Trustee Agreement

There is a contentious issue regarding the appointment of a bond agent in which covered bonds are issued on a private basis. Some experts believe that the provisions of Article 71(3) of the Act, combined with Rule 18(1)(c) of the Bond Rules, must be complied with in the case of the issuance of covered bonds, whether the bonds are issued in a “private placement” or with fewer than 500 members. The tasks of a bond agent are definitively defined. Some of them are convertible bonds: there are ambiguities about the listing of convertible bonds issued on a private basis by an unlisted company. Therefore, we have not analyzed the requirement to order an agent under this direction. A bond exchange agreement consists of two parts, the company and the bond agent. A bond is an instrument for debt relief. A bond agent is a person who is responsible for the trust instrument for securing the obligations of each business. This agent can be a bank, an insurance company or another entity. There may be cases where a supervisory authority requires the appointment of a trustee as an obligation in relation to its respective directives or instructions. Some of these cases are mentioned in this section for better readability. The concept of bond agents was developed because of the difficulties encountered by an issuing company when dealing separately with each bondholder to obtain its agreement on various issues and to issue bonds where the bonds have been issued to several bondholders. In order to overcome this practical difficulty, it was felt that it was necessary to create a one-stop shop for the issuing company and to carry out its functions on behalf of many bondholders, in accordance with the instructions of the bondholders, with regard to the provisions of the debt instrument.

In its Master Direction on Money Market Instruments: Call / Notice Money Market, Commercial Paper, Certificates of Deposit and Non-Convertible Debentures (initial term up to one year) makes mandatory the appointment of a bond agent in cases where companies (including a non-bank financial company) issue bonds with a duration of less than or equal to one year. . . .