To issue corporate bonds, a company must comply with the applicable rules of the Capital Markets Act. This includes preparing a prospectus with detailed information on:
Persons responsible for the documentation, third parties, expert reports, and the approval of the competent body;
Strategies, business results, and business environment;
Risk factors;
Corporate governance;
Financial information and KPIs;
Information on shareholders or owners;
Securities (maturity, interest, etc.).
Once the Securities Commission of the Republic of Serbia approves the prospectus, the company can publish it and commence the bond sale. They must also provide the necessary documentation to the Central Securities Depository and Clearing House regarding the individuals who purchased the bonds.
The worldwide ESG bond market is still expanding. It is expected to grow by an additional EUR 5 bn in 2024 compared to 2023, amounting to EUR 820 bn total, and the Serbian ESG market has shown that it is ready for the change. The Republic of Serbia issued a seven-year EUR 1bn green bond. The bond was issued at 1.00%, the lowest coupon rate ever, and a yield rate of 1.26%, while investor demand in the auction exceeded EUR 3 bn, demonstrating Serbia’s commitment to sustainability.
Considering ESG bonds about the EU’s Carbon Border Adjustment Mechanism (CBAM) is also essential. ESG bonds, especially green and sustainability-linked bonds, can aid in financing the company’s efforts to reduce CO2 emissions. Reducing CO2 emissions will eventually decrease the cost of CBAM when exporting certain goods to the EU.
Source: Gecic law
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