Bond offering: Mallesons put new rules to the test

Mallesons Stephen Jaques has acted for Primary Health Care in the first retail bond offer to be made under new class orders. The Australian Securities and Investments Commission (ASIC) launched the new rules for the release of retail bonds in May in a bid to reduce the disclosure burden on issuers.

One of the main differences under the new rules is that there is a two-part prospectus for issuers, comprising of a base prospectus (which may be used for a number of different offers) and a second part prospectus (which will relate to a particular offer). M&A partner David Eliakim told ALB the base prospectus can be used for a period of two years, which will in the long run decrease the costs for issuers which undertake multiple offers.

The second major change is that there is now more detail on what needs to be included in the prospectus. “There is now a list of prescribed information that has to go into the prospectus. Previously you and the client would include all the information that you thought could be required,” said Eliakim. “The new rules are designed to make the bond issuance process simpler and quicker and our experience on this transaction was that the new rules work well.”

While there will be less work involved in some original offers and following offers, Eliakim said he does not expect this to decrease the amount of work for his profession in the long run. “We expect that a number of other corporates will consider retail bond issuance in light of this deal," said Eliakim.
Primary Health Care is seeking to raise approximately A$125m under the offer. Along with Eliakim, the Mallesons team working on the offer included partners David Friedlander and Phil Harvey senior associate Jonathan Grant and solicitors John Eagleton and Hoda Nahlous.

Freehills advised the joint lead managers National Australia Bank, Evans and Partners, Deutsche Bank and Ord Minnett (with National Australia Bank and Evans and Partners acting as joint arrangers).

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