116 4 Debt
rective; the Market Abuse Directive; the Settlement Finality Directive and the
Collateral Directive; as well as the Clearing and Settlement Code of Conduct. All
financial services directives provide for home Member State control.
Prospectus. The Prospectus Directive can apply to some bond offers. In addi-
tion to shares, the Prospectus Directive also applies to debt securities when they
are either “offered to the public” or “admitted to trading on a regulated market
situated or operating within a Member State”.^139 However, the Prospectus Direc-
tive does not apply to government bonds and similar securities issued by public
authorities, or to certain non-equity securities issued in a continuous or repeated
manner by credit institutions.^140 Neither does it apply to money market instru-
ments having a maturity of less than 12 months.^141
Although the Prospectus Directive might be applicable, the obligation to pub-
lish a prospectus does not apply to certain types of offer. This enables issuers to
circumvent the duty to publish a prospectus. The obligation to publish a prospec-
tus under the Prospectus Directive does not apply to: (a) an offer of securities ad-
dressed solely to qualified investors; and/or (b) an offer of securities addressed to
fewer than 100 natural or legal persons per Member State, other than qualified in-
vestors; and/or (c) an offer of securities addressed to investors who acquire securi-
ties for a total consideration of at least €50,000 per investor, for each separate of-
fer; and/or (d) an offer of securities whose denomination per unit amounts to at
least €50,000; and/or (e) an offer of securities with a total consideration of less
than €100,000 (calculated over a period of 12 months).^142
On the other hand, some information obligations will remain even when no
prospectus is required provided that the transaction falls within the scope of the
Directive (for example, money market instruments do not, but the offering of
bonds with a longer maturity to qualified investors does). First, “material informa-
tion provided by an issuer or an offeror and addressed to qualified investors or
special categories of investors, including information disclosed in the context of
meetings relating to offers of securities, shall be disclosed to all qualified investors
or special categories of investors to whom the offer is exclusively addressed”.^143
Second, the Prospectus Directive also regulates advertisements (see section
5.9.3).^144
The European High Yield Association and the Loan Marketing Association recommend
further disclosures when securities are to be listed or otherwise publicly traded. An issuer
of non-investment grade debt facilities should make publicly available the key documenta-
tion for its material debt facilities and intercreditor arrangements. In addition, an offering
memorandum for a new issue of non-investment grade debt securities should disclose the
key terms of the issuer’s other material debt facilities and other financings, including, with
respect to each material facility and instrument: key payment terms; financial covenants;
(^139) Article 1(1) of Directive 2003/71/EC (Prospectus Directive).
(^140) Article 1(2) of Directive 2003/71/EC (Prospectus Directive).
(^141) Article 2(1)(a) of Directive 2003/71/EC (Prospectus Directive).
(^142) Article 3(2) of Directive 2003/71/EC (Prospectus Directive).
(^143) Article 15(5) of Directive 2003/71/EC (Prospectus Directive).
(^144) Article 15 of Directive 2003/71/EC (Prospectus Directive).