CORPORATE BONDS

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Corporate bonds have been defined by the International Organisation of Securities Commissions (IOSCO) as “debt instruments denoting the obligation of an issuer / company to satisfy a holder’s claim to capital repayment and interest (and/or any other commitments entered into by the issuer)”

A corporate bond must have at least the following characteristics:

 

• Denomination in MUR, USD, Euros or in any other currency acceptable to the Financial Services Commission (FSC)

• A tenure of more than one year (365 days)

• Fixed term with principal and any accrued interest / returns payable at maturity

• Fixed or variable rate of return

• Interest / return / profit to be paid periodically on certain specified intervals

• Exclude all government bonds

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GREEN BONDS

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A green bond is a debt instrument which facilitate capital-raising and investments into new and / or existing qualifying green projects which have environmental benefits & can mitigate risks associated with climate change.

The revenue from green bonds can only be used for the funding of qualifying green projects which have clear environmental benefits. The qualifying green project categories include the followings:

• Renewable and sustainable energy

• Energy efficiency

• Pollution prevention and control

• Terrestrial and aquatic biodiversity conservation

• Clean transportation

• Sustainable waste management including recycling, efficient disposal of wastage

• Climate change adaptation

• Green buildings

• Environmentally sustainable management of living natural resources and land use

• Eco-efficient and/or circular economy adapted products, production technologies and processes

Method of Issue of Corporate and Green Bonds in Mauritius

There are two ways to issue corporate & green bonds in Mauritius notably:

1. Public Offer; and

2. Preferential Offer

 

Public Offer

A Public Offer is where the issuer offers corporate and green bonds to the whole public and in such situation, the issuer must register a prospectus with the FSC. The prospectus must be in line with the Securities Act 2005 and Securities (Public Offers) Rules 2007.

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Preferential Offer

A Preferential Offer is an offer or issue of securities as a private placement or which is made to only sophisticated investors or to related corporations of the issuer. A preferential offer must be done in compliance with the Securities (Preferential Offer) Rules 2007 in terms of allotment of securities, rating and listing of debt securities, contents of the preferential offer document and any other matters.

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Main Characteristics and Requirements of Corporate Green Bonds 

An issuer of corporate and green bonds can be the followings:

1. A reporting Issuer – who by way of a prospectus, has made an offer of securities or who has made a takeover offer by way of an exchange of securities as per the Securities Act 2005.

2. An issuer as defined in the Securities Act 2005 who satisfied the following conditions:

   1. Where the company’s total value of net assets exceeded MUR 100 million (approx. USD 2.4 million) not earlier than 18 months prior to the offer.

   2. The Company has a positive track record demonstrating the following:

      1. Has been in existence for at least 3 years

      2. Has a positive net profit after tax over the last 12 months

      3. Has maintained a Debt / EBITDA for the last 2 financial periods at a weighted average of 4 times or less

      4. Has no history of recurrent default / late payments based on its MCIB or any relevant reports

 

An issuer who does not meet the conditions 1 or 2 above but proposes to issue green bonds to sophisticated investors only.

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