Bond issuance in Georgia is one of the most popular instruments for companies to attract long-term financial resources. Corporate bonds allow a business to raise funds directly from investors, bypassing the banking sector, which often implies more favorable interest rates and flexible terms. In recent years, the volume of bond issuances in the Georgian capital market has significantly increased, aided by both legislative reforms and increased interest from investors. Issuing bonds requires high transparency from a company, adherence to corporate governance standards, and strict financial discipline. This process includes several legal and financial stages, starting from the emission resolution and ending with the placement of securities on the stock exchange. The Legal.ge platform connects you with capital markets expert lawyers who provide full legal support for the emission process.
What does the Bond Issuance service cover?
The bond issuance service includes complex legal and consulting support for the issuing company. The service covers the following issues: structuring the emission (public offering or private placement); preparing and registering the emission prospectus with the National Bank of Georgia; developing the terms and conditions of the bonds, including the interest rate (coupon), maturity date, and determination of security mechanisms; preparing contracts with the emission agent and registrar; conducting legal Due Diligence and preparing the relevant conclusion; representation in the listing process with the Georgian Stock Exchange (GSE); compliance with securities market regulations; and legal review of the investment memorandum and marketing materials. Lawyers will also assist in selecting and regulating the relationship with the Bondholders' Trustee.
Common real-world scenarios
The need for bond issuance arises in various business situations. The most typical scenario is "debt refinancing" when a company issues bonds to cover existing high-cost bank loans. The second scenario concerns financing large infrastructure or production projects where large volumes of long-term capital are needed. The third scenario is the issuance of "Green Bonds," aimed at financing environmentally friendly projects and attracting specific investors. It is also common for a company to issue "convertible bonds," which give the investor the right to receive company shares later instead of debt repayment. Each of these cases requires a detailed processing of emission documentation to protect both the issuer's financial stability and the rights of investors.
Georgian Legal Framework
Bond issuance in Georgia is primarily regulated by the Law of Georgia on the Securities Market. This law defines the rules for the public offering of securities, the content of the emission prospectus, and registration procedures. Also important is the Civil Code of Georgia, which regulates the law of obligations and issues of pledge/mortgage in case of bond security. Orders of the President of the National Bank of Georgia establish detailed instructions for issuers on information disclosure and reporting. Furthermore, in case of listing, Rules of the Georgian Stock Exchange apply. A lawyer's participation is necessary for the correct interpretation of these complex regulations so that the company avoids sanctions for incorrect information disclosure.
Step-by-step process when working with a specialist
The process begins with emission structuring and developing a plan together with financial advisors. In the first stage, the lawyer carries out a legal audit of the company to exclude factors hindering the emission. In the second stage, an emission prospectus (for public emission) or an information memorandum (for private placement) is prepared. In the third stage, documentation is submitted to the National Bank for registration, which includes considering the regulator's remarks. In the fourth stage, the placement of bonds (Book-building) and signing of contracts with investors occurs. The fifth stage involves the listing of bonds on the stock exchange and inclusion in the trading system. Throughout this period, the lawyer ensures compliance of all procedures with the law and coordinates communication with the registrar and depository.
Why choose Legal.ge?
Bond issuance is a process of high responsibility where legal precision is of decisive importance. On the Legal.ge platform, you will find verified lawyers and consulting firms that have successful experience in the Georgian capital market. Our experts will help you in the impeccable preparation of emission documentation and ensure the protection of your company's interests when dealing with investors. Through Legal.ge, you save time and receive high-quality service, which is essential for a successful emission. Find your specialist on Legal.ge and raise capital through bonds with the help of professionals.
Updated: ...