.PNG)
Chisinau, May 4th, 2022 – The National Commission for Financial Markets (NCFM), with the support of the USAID Moldova Structural Reform Program introduces the Practical Guidelines for the Issuance and Trading of Corporate Bonds. The event brought together professionals representing the capital market, the business community and the press.
The Guide, developed with the support of the USAID Program, describes the essential elements of corporate bond issuance and trading and provides detailed responses to what is a corporate bond, how do bonds appear, how do investors buy bonds, what are the benefits of issuing and holding bonds.
The bond issue functions as a loan, under which the issuer borrows money from the investors who become bondholders. Purchasing bonds may look similar to concluding a "contract", where the object are the securities issued in form of debt securities (bonds), the investor (bondholder) acts as a creditor, and the issuer acts as a borrower. When issuing the bonds, the issuer undertakes to repay the money borrowed and to pay interest.
Bonds are among the most efficient and common forms of financing, along with share capital allocations and loans from specialized institutions. As with any investment, investors should thoroughly analyze and document the use of this financial instrument before deciding to make the investment in order to assess all related risks. The Guide is intended for both corporate bond issuers and individuals and legal entities willing to invest in the capital market for purpose of future gains. The basic purpose of the Guide is to promote confidence in the services and financial instruments specific to the capital market in the Republic of Moldova and to raise public interest in this type of investments.
Cornelia Cozlovschi, President of the National Commission for Financial Markets stated in her welcome address, that “The common effort of the supervisory authority and the experts of the USAID Program is intended to highlight and emphasize not only the benefits of the relevant procedural instruments used by joint stock companies or limited liability companies to attract investments through placement of corporate bonds, but also the steps to be followed by those who intend to attract capital, as well as those who intend to invest in this capital. The Guide also describes the opportunities of holding such financial instruments, as well as the levers to feed the interest of potential investors in exploring this segment of the capital market. Today's event is part of a series of inherent measures, which the National Commission aims to carry out in order to support promoting proactive policies and approaches designed to channel the savings to the capital market".
Milo Stevanovich, the Director of the USAID Moldova Structural Reform Program emphasized that “Our Program has provided support to the National Commission for Financial Markets to streamline procedures for companies to issue corporate bonds, to draft law amendments on recourse/collateral protections for bond issuances and to improve regulations related to non-bank credit organizations and to actuarial activity. The development of the Guide for the issuance and trading of corporate bonds is a real result of the Program’s effort in promoting the issuance of corporate bonds, achieved in cooperation with the National Commission for Financial Markets. I would like to thank the National Commission for Financial Markets for very fruitful cooperation with USAID Moldova Structural Reform Program and wish you all the best, and also to succeed with development of capital market in Moldova”.
The practical Guidelines for the Issuance and Trading of Corporate Bonds is available on the NCFM website: www.cnpf.md
