Listings on TISE in 2024

During the first half of 2024, 444 securities were listed on TISE for a variety of purposes, noting the vast majority are debt securities issued by UK and European issuers as part of private equity acquisition finance structures. It is widely recognised that a listing on a HM Revenue and Customs-recognised stock exchange, such as TISE, provides a consistent solution for private equity firms looking to benefit from the Quoted Eurobond Exemption.

The total market value of all securities listed on the market surpassed the £700 billion mark for the first time, and the total number of securities on TISE’s Official List reached 4,371 at 30 June 2024, both of which are record highs in the history of the Exchange.

More than 25% of all securities newly listed during this period originated from the EU, including issuers domiciled in France, Germany, Ireland, Luxembourg and The Netherlands, however the UK remained the largest single source of new business, followed by Luxembourg and Jersey. Interestingly, approximately 3% of new business came from the US and Canada and a smaller but significant proportion from Australia.

Types of Debt Securities listed on the Qualified Investor Bond Market (QIBM)

Whilst there were several equity listings during the first half of 2024, the majority of new listings were debt securities on TISE’s leading European professional bond market, the Qualified Investor Bond Market (QIBM). The three main categories were:

Private Equity – 147 listings, driven by the value to clients of a proven path to listing, there are now nearly 2,000 private equity Debt Securities listed on TISE.
High Yield – 64 listings, almost 3 times more than in the same period last year, as borrowers refinance (or repay) their outstanding debts and new issuers come to the market.
Securitisations – 62 listings, which is more than double in the same period last year. TISE continues to grow its reputation as a listing venue for this debt product and has more than 500 securitisation bonds admitted to its Official List.

Characteristics of recently listed Debt Securities (Notes) can be summarised into four sections:

Types of Notes / Debt Securities
Types of Interest Payment
Types of Security (assets pledged as collateral)
Types of Repayment

1. Types of Notes / Debt Securities

Bridge Notes – short-term financing secured to “bridge the gap” until a noteholder obtains longer-term financing.
Convertible Notes – Notes issued by companies that are convertible to company/issuer shares, depending on the circumstances.
Exchangeable Notes – a type of hybrid Debt Security that can be converted into the shares of a company other than the issuing company (usually a subsidiary).
Interest Bearing Notes – represents funds loaned by a noteholder to the issuer, on which interest accrues in accordance with the terms of the loan note instrument.
Multicurrency Notes – Notes that include denominations in different national currencies, often for companies who work with multiple currencies.
Note Program – allows the issuer to offer its new tranches/series of Notes from time to time without producing extensive legal documents at the time of each issuance of Notes.
Promissory Notes – a financial instrument that contains a written and signed promise between two parties to repay a sum of money in exchange for a loan or other financing.
Promissory Notes evidencing other debts – as above, used to evidence pre-existing debts of the issuer.
Revolving Facility – revolving loan facility, also called a revolving facility or simply revolver, is a form of credit that provides the issuer with the ability to draw down or withdraw, repay, and withdraw again.
Repo Backed Notes – repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities.
Repackaged Notes – a structured finance instrument issued by a bankruptcy remote SPV.
Secured Notes – a Note that is backed by the issuer’s assets as a form of collateral. If the issuer defaults on a secured Note, the assets pledged as collateral can be used/sold to repay the Note. (see section below)
Securitisation – the financial alchemy of taking not-easily- or non-tradable assets, pooling them together, and selling tradeable securities in that pool to investors.
Sustainability-Linked Bond (SLB) – a fixed income Debt Security where its financial and/or structural characteristics are tied to predefined Sustainability/ESG objectives.
Tier 2 Bonds – bonds that form an essential component of the second layer of banking capital known as Tier 2 capital that are categorised as subordinated (they are paid back only after higher-ranking debts have been settled).
Trust Certificates – Notes usually issued by a public corporation, that are backed by other assets. These can be sukuk which is a sharia-compliant bond-like instrument used in Islamic finance.
Unsecured Notes– Notes not secured by the issuer’s assets.
Unsubordinated Notes – also known as a senior security refers to a type of obligation that must be repaid before any other form of debt.
Variable Funding Notes (VFN) – issued under a loan note instrument, where the principal balance thereof may increase or decrease from time to time.
Warrants – a derivative that gives the holder the right but not the obligation to buy an underlying security at a certain price, quantity, and future time.

2. Types of Interest Payment

Blended Variable Interest Notes – the interest rate on Notes that represents a combination of a previous rate and a new rate, usually in refinancing.
Credit-Linked Notes (CLN) – Notes with an embedded credit default swap permitting the issuer to shift specific risk to credit investors.
Equity-Linked Notes (ELN) – an investment product that combines a fixed-income investment with additional potential returns that are tied to the performance of equities.
Euribor plus % – a basic rate of interest used in lending between banks on the European Union interbank market and also used as a reference for setting the interest rate on other loans, plus a fixed/variable percentage.
Fixed Rate Notes – Debt Securities that pay the same level of interest over their entire term.
Fixed Term Notes – Debt Securities with a fixed maturity date of one year, three years or five years.
Floating Rate Note – floating-rate Notes (FRN) have a variable interest rate. The interest rate for an FRN is tied to a benchmark rate.
High-yield bonds – bonds that pay higher interest rates because they have lower credit ratings than investment-grade bonds.
Payment-in-Kind Notes (PIK) – a financial instrument that pays interest or dividends to investors of bonds, Notes, or preferred stock with additional securities or equity instead of cash.
Pay-if-you-can PIK Notes – where interest is supposed to paid in cash at specific intervals or at a designated cadence. If the conditions surrounding interest payments are not satisfied, the issuer may opt to make a payment-in-kind interest payment.
Preferred Loan Notes – give their holders a priority claim whenever an issuer pays interest on Notes.
Profit Participating Notes (PPNs) – a Debt Security whereby the security holder receives a share of the profits of the issuer in return for the provision of principal.
SONIA – a basic rate of interest used in lending between banks on the European Union interbank market and also used as a reference for setting the interest rate on other loans, plus a fixed percentage.
SOFR – Secured Overnight Financing Rate is a fully transaction-based interest rate that has mostly replaced LIBOR (London Interbank Offered Rate) that is being phased out.
Toggle Notes – a type of PIK Note where the issuer has the option to defer an interest payment by agreeing to pay an increased coupon in the future.
Variable Rate Notes – a variable interest rate (also called an “adjustable” or “floating” rate) is an interest rate on a Note that fluctuates over time as it is based on an underlying benchmark interest rate or index that changes periodically.

3. Types of “Security” (assets pledged as collateral)

Asset-Backed Securities (ABS) – a type of financial investment that is collateralized by an underlying pool of assets — that usually generates a cash flow from debt, such as loans, leases, credit card balances, or receivables.
Commercial Mortgage Backed Notes (CMBS) – fixed-income securities backed by mortgages on commercial properties rather than residential real estate.
Guaranteed Notes – Notes that offer a secondary guarantee that interest and principal payments will be made by a third party, should the issuer default due to reasons such as insolvency or bankruptcy.
Residential Mortgage-Backed Notes (RMBS) – debt-based assets backed by the interest paid on residential loans.
Senior Notes – a type of bond that takes precedence over other debts in the event that the issuer declares bankruptcy and is forced into liquidation.
Subordinated Notes – unsecured Debt Securities that rank below other, more senior loans or securities with respect to claims on assets or earnings.

4. Types of Repayment

Alternative upside instruments – a feature which provides a noteholder with exposure to the potential increase in value of the issuer itself (rather than only a right to receive interest payments on Debt Securities).
Amortising Notes – where payments of principal and interest on Debt Securities are made in instalments over the life of such securities. Often the payments will be applied to the interest due and payable thereon, before reducing the unpaid principal amount.
Callable Notes – where the issuer may redeem Notes before they reach the stated maturity date.
Extendable Notes – a long-term Debt Security that includes an option which allows a noteholder to extend its initial maturity to a later date.
Puttable Notes – allows the noteholder to force the issuer to repurchase the Notes at specified dates before maturity.
Redeemable Notes – the issuer may redeem Notes before they reach the stated maturity date.

Appleby and ASCIL

Appleby is a leading listing agent with TISE and assists domestic and international issuers listing securities on TISE. Appleby also act as an issuer’s ongoing listing agent and assists them in meeting their continuing obligations as a listed issuer on TISE. Appleby’s listings team is committed to delivering a highly professional and integrated service, coordinating the listing process and supporting the issuer through their application.

Appleby provides advice to companies and their advisers whether they are issuers, sponsors, lead managers, shareholders or underwriters. They also work alongside other international law firms as part of a wider advisory network.

For more information, please speak to your usual Appleby contact.