A company has to do plenty of work before accessing the bond markets for more capital. Brad Meiers, a corporate debt specialist, took Financial Pipeline co-editor Romina Maurino through some of the most important steps.
RM: If we’re looking at the issue process for corporate bonds in Canada, can you take me through the short version, if there is such a thing, what a company needs to do to access the Canadian debt markets?
BM: Sure, so there’s a couple ways that a company can access the markets. They can either do it through a long-form prospectus, which is more for infrequent issuers. The more frequent issuers . . . and what is generally done in the market is they set up a shelf which allows them to access the market at anytime, so all the real documentation with respect to what the indenture will look like, what the covenants would look like, what the general form of issuance will look like is done ahead of time so they can access the market quickly. Just to backup, one of the things an issuer needs to have is ratings, which is an important part of the process – they have to have all the documents in place and then they have to have a syndicated investment dealers together to be able to get the process going to engage the investors and bring the issue to market.