7 Apr 2016

AFME promotes industry-wide best practice in high yield debt securities offerings

AFME’s High Yield division has today updated many of its standard forms to help establish good practice for the industry. The documents were updated as part of AFME’s general review of its standard documentation, and following buy- and sell-side discussions among AFME’s High Yield members, in a wider effort to maintain and improve business practices in the European high yield market.

Gary Simmons, Managing Director of AFME’s High Yield Division, said: "It is important that the changes made in our standard forms are adopted on an industry-wide basis to promote best practice in the high-yield bond market. A number of stakeholders across the industry gave valuable input during the revision of these documents and we hope they will help address some of the issues brought to our attention regarding structure, disclosure and transparency."

Among the revised documents are updated Disclosure Guidelineswhich were last revised in December 2011. It is hoped these guidelines will help the market tackle issues such as the use of passwords and other restrictions that are seen to limit access to information about bonds on issuer websites, as well as general disclosure and transparency issues regarding deal terms and structures.

Also updated are AFME’s standard forms for the Agreement Among Initial Purchasers (AAIP) – both New York and English Law versions – to reflect market developments since they were last updated (for example, the US JOBS Act and the Bank Recovery and Resolution Directive in Europe).

Given that listing practices for non-investment grade debt securities can vary, AFME has also put together new Recommended Listing Practice Guidelines to encourage industry-wide good practice in that area.

AFME has also updated its boiler plate prospectus sections including:

All of the updated forms can be found on the AFME website.

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