Emergency rules on the issuance of “Corona bonds” in Serbia

The Government of Serbia adopted on 10 April 2020 the emergency Decree on the Procedure for Issue of Debt Securities (“Decree“), which provides for the simplification of the current regime regarding public offerings of debt securities by Serbian companies on the territory of Serbia. This new simplified regime will be in force for a period of 180 days following the end of the state of emergency. This is motivated by the desire to foster financing of the liquidity by corporate bond offerings in the wake of the COVID-19 crisis.

The Decree releases prospective issuers from the obligation to prepare short form prospectus. It also significantly cuts down paperwork required in order to obtain the SEC’s approval. Namely, documents that are publicly available and can be obtained from public registers are no longer required to be submitted to the SEC. This relates to current information on the issuer from the commercial registry, published financial statements, stock exchange information in case of public companies, share ownership structure available at the central registry and depository of securities etc. Furthermore, information about the issuer and its financial statements does not have to be included in the prospectus, but the prospectus may refer or link to publicly available or online information (e.g. the issuer’s website, website of the commercial registry, the central register and depository of securities, or the register of financial statements). The issuer is required to list all referenced documents and webpages on which they can be found, and specify which relevant information can be found in which document and which section of the document.

Audited financial statements (including the consolidated ones if the issuer is subject to the obligation to prepare consolidated statements) for the year preceding the year in which the SEC’s approval for the prospectus is sought have to be attached as an integral part of the prospectus. When applying for the SEC’s approval of the prospectus, if no more than 200 days have passed since the end of the relevant financial year and the date of the application for the SEC’s approval, the issuer is not required to additionally prepare and submit to SEC semi-annual financial statements for the current year.

The SEC is required to approve publication of the prospectus for the offering of debt securities within 10 days from the receipt of the issuer’s application (provided that the application is complete).

Following the completion of the public offering, the bond issuer obtains the status of a public company, which triggers various reporting and other regulatory obligations. However, the issuer organized as private joint-stock company or limited liability company is not required to apply for the listing of its shares at the regulated market.

In order to facilitate the implementation of this Decree, the SEC is required to prepare a regulation setting out new simplified form and minimum contents of the prospectus for debt securities offered in accordance with the Decree, until 25 April 2020).