The following Banking & Finance Q&A provides comprehensive and up to date legal information covering:
In this Q&A, it has been assumed that there has been no event of default, and so the notes have not been accelerated.
An issuer of bonds is the entity wishing to raise finance in the debt capital markets. The issuer will appoint an agent or (more normally) a group of agents to carry out various administrative duties for it in connection with the issue. One agent will co-ordinate the whole process. The term used to describe this entity depends on whether the structure involves a trustee or not. If the issuer chooses to appoint a trustee, the bonds will be constituted by a trust deed. The trust deed will also set out the duties of the trustee and the issuer’s main agent will usually be the principal paying agent. If it is not an issue with a trustee, then the issuer's co-ordinating agent will be the fiscal agent and the notes will be constituted by a deed of covenant.
A fiscal agent has limited scope to amend the terms and conditions of the bonds without the consent of the bondholders. It can only usually do so in the following circumstances:
where a modification is needed which is 'not prejudicial' (note this: the test is ‘not prejudicial’ rather than ‘not materially prejudicial’) to the interests of the bondholders, and
where a formal, minor or technical modification
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