Key tax issues when advising on a bond issue
Key tax issues when advising on a bond issue

The following Tax guidance note provides comprehensive and up to date legal information covering:

  • Key tax issues when advising on a bond issue
  • When does a tax lawyer get involved in a bond issue?
  • Checklist of key non-tax questions to ask on the structure of the issue?
  • Key tax issues that arise on a bond issue
  • Checklist of key documents on a bond issue for tax lawyers

When does a tax lawyer get involved in a bond issue?

A tax lawyer is often not called upon until:

  1. the company wishing to raise finance has already decided to raise finance by way of issuing a bond

  2. the issuer has appointed its lead manager (usually a bank or broker) to manage the issue for it, and

  3. the lead manager has 'launched' the bond by appointing (or at least approaching) co-managers to assist in selling and underwriting the bond issue

The main exception to this is where a tax lawyer is involved in helping the issuer to decide between different choices of financing and their tax consequences. This Practice Note focuses on the key issues arising once the decision to proceed with a bond issue has been taken.

When a tax lawyer does get involved it may be in advising the issuer itself or the lead manager. In many ways, it doesn't matter which party the lawyer is advising because both clients have the same objective: to get the bond issued correctly, in an appropriate time frame and within the law. However there are some elements of the transaction where the parties are negotiating with each other, eg on the VAT costs associated with the fees of the managers. It should be said, though, that in a public market debt issue