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In accordance with Article 248, Paragraph 2 of the Company Act and Article 43-6, Paragraph 3 of the Securities and Exchange Act, what should non-public companies pay attention to when issuing corporate bonds with private placement activities, such as issuing green corporate bonds with ESG goals?
In accordance with Article 248, Paragraph 2 of the Company Act and Article 43-6, Paragraph 3 of the Securities and Exchange Act, what should non-public companies pay attention to when issuing corporate bonds with private placement activities, such as issuing green corporate bonds with ESG goals?
According to Article 248, Paragraph 2 of the Company Act and Article 43-6, Paragraph 3 of the Securities and Exchange Act, when a non-public company issues corporate bonds through private placement, such as issuing green corporate bonds with ESG goals, it should pay attention to the following matters:
1. Issuance procedures and legality: Non-public companies should understand and comply with the relevant provisions of the Company Act and the Securities and Exchange Act in detail before issuing corporate bonds. Ensure that the issuance process is legal and compliant, and obtain relevant legal documents and licenses, such as approval documents from stock exchanges.
2.Purpose and Use of Issuance: Clearly determine the purpose and use of issuing green corporate bonds, especially for projects related to ESG goals. It is necessary to clearly disclose which environmental, social, or sustainable development projects the funds will be used for, ensuring that the funds are specifically used for projects that meet ESG standards.
3. Disclosure Requirements: According to the requirements of the Securities and Exchange Act, issuers should ensure that investors receive adequate and accurate information disclosure for non-publicly issued corporate bonds. Including relevant information about the project, risk factors, the issuer's financial status and business conditions, etc. In addition, ensure that the information disclosed is true, comprehensive, and free from misrepresentation.
4.Investor Protection: Non-public companies should ensure investors' rights and protections. This includes ensuring that investors have the right to access information disclosure, a comprehensive understanding of investment risks, and reasonable exit mechanisms, such as repayment plans or conversion mechanisms.
5.Project Evaluation and Verification: Issuers may consider conducting evaluation and verification of green projects to ensure project compliance and green nature. You can choose to entrust a professional third-party organization to conduct evaluation or verification, increasing investors' confidence and credibility in the project.
6.Environmental and Sustainability Supervision: Effective environmental and sustainability monitoring mechanisms must be established to track the implementation and green benefits of the projects in which green corporate bonds are located. This includes regularly monitoring and evaluating the green performance of projects to ensure compliance with ESG goals and commitments. If the project fails to achieve the expected environmental benefits, corresponding corrective measures or reports must be taken in a timely manner.
7.Compliance with relevant laws and regulations: When issuing green corporate bonds, non-public companies need to comply with relevant laws and regulations, including the Company Act and the Securities and Exchange Act. Ensure the legality and legality of the issuance process to avoid possible legal risks and liabilities.
8.Professional Advice and Advisory: To ensure that the issued green corporate bonds comply with ESG goals and best practices, non-public companies can seek appropriate professional advice and advisors. These professional institutions can provide professional advice on ESG goal evaluation, project verification, legality review, and other matters to help issuers make informed decisions.
9. Transaction Structure and Issuance Terms: Determine the transaction structure and issuance terms of green corporate bonds, including interest rates, maturities, principal repayment methods, etc. These terms should align with ESG goals, align with investor expectations and market needs, while ensuring the issuer's financial sustainability.
10. Marketing and Investor Communication: Non-public companies should actively conduct market promotion to introduce the characteristics and environmental benefits of green corporate bonds to attract more investors. At the same time, establish a good investor communication mechanism to answer investors' questions and explain the motivation for issuing green corporate bonds and the implementation of projects.
Non-public companies issuing green corporate bonds with ESG goals through private placements need to carefully comply with the provisions of the Company Act and the Securities and Exchange Act to ensure legality and investor protection. At the same time, the purpose and use of the issuance must be determined, sufficient information disclosure must be carried out, relevant laws and regulations must be complied with, and professional advice and consultant support must be sought. When issuing green corporate bonds, here are some things to keep in mind:
Non-public companies issuing green corporate bonds with ESG goals through private placements need to carefully comply with the provisions of the Company Act and the Securities and Exchange Act to ensure legality and investor protection. At the same time, the purpose and use of the issuance must be determined, sufficient information disclosure must be carried out, relevant laws and regulations must be complied with, and professional advice and consultant support must be sought. When issuing green corporate bonds, here are some things to pay attention to:
1.Issuance plan and documents:
Before issuing green corporate bonds, non-public companies should formulate a complete issuance plan and relevant documents. These documents should include bond prospectuses, issuance announcements, offering documents, etc., to provide potential investors with detailed project information and investment conditions.
2.Professional Verification and Audit:
To increase investor confidence in green corporate bonds, non-public companies can consider obtaining corresponding professional verification and audit. This includes assessments by environmental verification bodies and audits by professional organizations to ensure that projects meet green requirements and ESG standards.
3.Investor Communication and Engagement:
Non-public companies should establish effective investor communication mechanisms to provide investors with sufficient and accurate information to answer their questions and concerns. This helps build strong investor relations and increases investor participation in green corporate bonds.
4. Supervision of the use of funds:
To ensure that the funds from the issued green corporate bonds are used for projects that meet ESG standards, it is necessary to establish an effective fund use supervision mechanism. This can be achieved through project monitoring reports, independent audits, etc., ensuring transparency and compliance with funds.
5. Project Reporting and Evaluation:
Non-public companies should regularly report and evaluate the implementation and green benefits of the projects in which the green corporate bonds issued are issued. This helps investors understand the progress and effectiveness of the project, improving the transparency and sustainability of the project.
6.Risk Management and Control:
Non-public companies need to fully assess and manage the risks associated with green corporate bond issuance. This includes market risk, credit risk, environmental risk, etc. Non-public companies should formulate risk management strategies and control measures to ensure effective risk management and control.
7. Legal Compliance and Regulatory Requirements:
Non-public companies should comply with relevant legal compliance and regulatory requirements when issuing green corporate bonds. This includes legal provisions such as the Company Act and the Securities and Exchange Act, as well as regulatory requirements for private placements. Ensure the legality and legality of the issuance procedure, reducing legal risks and liabilities.
8.Audit and Disclosure Obligations:
Non-public companies should fulfill corresponding audit and disclosure obligations. Timely financial reporting and disclosure in accordance with relevant laws, regulations and accounting standards, providing accurate, comprehensive, and true financial information to enhance investors' confidence in green corporate bonds.
9. Trustees and Custodians:
Non-public companies should choose appropriate trustees and custodians to manage the green corporate bonds issued. The trustee is responsible for exercising rights and interests on behalf of bondholders and supervising the issuer in fulfilling its obligations. The custodian is responsible for managing bond funds and the rights and interests of bondholders, ensuring the safety and compliance of funds.
10. Green Bond Certification and Rating:
Non-public companies can consider green bond certification and rating to enhance the recognition and investment attractiveness of green corporate bonds. Certification bodies and rating agencies can independently evaluate and verify issuers' green bonds, providing objective rating and certification results to provide investors with more information and reference.
In summary, when issuing green corporate bonds with ESG goals, non-public companies should comply with the provisions of the Company Act and the Securities Exchange Act in detail, conduct sufficient information disclosure, and ensure legality and investor protection. At the same time, it is necessary to determine the purpose and use of the issuance, establish effective supervision mechanisms, conduct environmental assessments and verifications, and establish good communication mechanisms with investors. Additionally, it is essential to focus on risk management and control, ensure compliance with regulatory requirements, select appropriate trustees and custodians, and consider measures such as green bond certification and ratings to increase investor trust and attractiveness. When implementing green corporate bond issuance, the provisions of the Company Act and the Securities and Exchange Act provide a legality and legal framework to ensure that the issued green bonds meet relevant requirements. By following these legal provisions, non-public companies can establish a good corporate image and reputation, increase investor trust, and gain better market acceptance.
However, the situation of each non-public company may vary, so it is recommended that non-public companies seek professional legal and financial advisors to ensure the legality and reasonableness of the issuance process during the specific implementation process. These professional institutions can provide detailed interpretations of corporate laws and securities exchange laws, provide relevant advice to issuers, and assist issuers in completing necessary documents and procedures. Finally, to ensure the successful issuance of green corporate bonds and investor participation, non-public companies should pay attention to the importance of information disclosure. Investors should have access to clear, accurate and comprehensive information, including detailed descriptions of green projects, environmental benefits, risk factors and financial status. Transparency and integrity of information disclosure are crucial to build trust and attract investors.
In conclusion, when issuing green corporate bonds through private placements, non-public companies should comply with the provisions of the Company Act and the Securities and Exchange Act, pay attention to issuance procedures and legality, clarify the purpose and use of the issuance, conduct sufficient information disclosure, and pay attention to investor protection and risk management. By complying with relevant laws and regulations, establishing transparent communication mechanisms and supervisory measures, non-public companies can achieve successful issuance of green corporate bonds, promote sustainable development, and achieve ESG goals.
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