FAQs
WHY IS IT BETTER THAN YOUR OWN DIP?
But The time required for a single emission is now minimal; once the documentary (DIP) is written, it goes very fast.
A: This is correct, but it still takes at least a day, usually a few days. Furthermore, as a corporate you need to maintain the full infrastructure of a debt issuance programme yourself. This means you need to pay for the establishment, for the maintenance, technical updates, annual updates, keeping up to date with legal developments, etc. With eppf not only can you forget about all these updates, but also you can forget about the costs. Since eppf maintains all its debt issuance programmes (DIPs) there is no cost for the borrower involved. The pay-as-you-print principle gets rid of most running costs. In case of frequent issuers you can also choose a subscription. In addition, if you have a finance subsidiary (usually in The Netherlands) you will have many more additional costs, such as guarantee fees, local tax, arms length intra-group loans, BEPS compliance, auditors, directors, service providers, travel costs and many more. By transferring your finance subsidiary and issuance to eppf, you will be able to save up to 80% to 90% of these costs. Finally, the automated and digitalised workflow makes issuance not only faster (documents within the hour, settlement T+1) but also the quality improves. No matter, which associate in your law firm or in-house lawyer is dealing with your issuance documentation, errors are almost impossible with eppf.
WHAT DOES THE PROSPECTUS LOOK LIKE AND WHAT DO I HAVE TO DO AS AN ISSUER?
The prospectus looks like a standard EMTN programme but is enhance by several key features that provide for flexibility. For example, all our documentation is available under German and English law. You can issue in both laws in one programme by just ticking a box in the final terms. Common covenants such as negative pledge, cross default/cross acceleration and change of control can be adapted in a similar way. eppf has also built in flexibility in terms of currency and terms of the notes. You can use any freely convertible currency plus Renminbi (CNH). In terms of structures, you can choose between fixed, floating and zero-coupon notes that allow for step up and down, callable and puttable, make whole provisions, linkage to any recognised index such as Euribor or others, etc.
As a borrower via eppf you will have literally only to sign a single agreement in order to join the platform. For setting up the documents we can either use your existing documentation (then it is blazing fast) or we will need your help for the first setup to describe your company adequately. We will take care about all the rest together with your relationship bank.
HOW DOES IT WORK WITH THE BANK CHARGES? WHO IS FORMALLY UNDERWRITING AND WHAT SHOULD IT COST?
The bank will still charge according to your agreement with them for the placement, KYC, AML, help with your capital market readiness and other things that banks do. eppf does not take part in these negotiations and they are completely down to you as borrower and your relationship bank. The accompanying bank will also figure on your prospectus or information memorandum and therefore has "skin in the game" facing investors which will help your placement as well.
eppf allows for two placement options:
(a) fully underwritten - this means that your banks will bear the risk that no investors can be found or that investors withdraw after the signing of the subscription agreement for the relevant deal. That is one of the reasons why the banks receive a fee from you as well.
(b) best efforts basis - the banks will speak to investors and try to place the full amount of your debt issuance but they do not commit to underwrite anything and your placement will depend on the subscriptions by investors during the filling of the order book. Since banks carry less risk in this case (which will rest with you) their fess are usually also lower.
eppf takes a very small fee either for each issuance (pay-as-you-print) or as an annual subscription for frequent issuers. There are also some other fees for example for the auditors and other service providers. These will be passed on 1-to-1 so that you have complete transparency.
WHAT IS THE EPPF
A cohesive, unified pan-European solution for next generation capital markets.
The eppf is a new, neutral infrastructure that provides investors access to private placements of corporates, municipal and regional authorities as well as agencies and other sub-sovereigns ("Borrowers") intermediated by banks in a cost efficient, standardized and regulated environment based on known practices and with a strong built-in quality control.
IS THE EPPF A BANK?
No. The eppf is not a bank and will work closely with major banks and rely on their expertise. The eppf is subject to the Luxembourg Securitisation Law and is regulated and supervised by the CSSF.
IS THE EPPF A SECURITISATION?
eppf transactions do not fall under the definition of securitization according to point (61) of Article 4(1) of Regulation (EU) No 575/2013. Notes issued by the eppf will reflect the credit risk of the underlying Borrower without tranching. eppf transactions with a guarantee also differ from traditional repackaging transactions due to the direct recourse (via the guarantee) to the underlying borrower. Not all eppf transactions do count with a guarantee though.
CAN I USE THE EPPF FOR MY FUNDING?
The same applies for municipal and regional authorities, state agencies and other sovereigns and sub-sovereigns.
Please contact your relationship bank and ask them if they are an approved dealer for the eppf. Many major banks are. If your bank is not yet an approved dealer you can either contact the eppf directly and we will put you in contact with one of our approved dealer banks or you can ask your bank to start the approval process.
WHO CAN USE THE EPPF?
Companies in Europe or elsewhere, municipal and regional authorities, state agencies and other sovereigns and sub-sovereigns.
I AM A BANK, HOW CAN I JOIN?
If you are a bank that is active in capital markets, please contact us and we are happy to start reviewing your application to become an approved dealer for the eppf.
WHAT ARE THE COSTS?
Costs will depend on each specific case and the agreement with your arranging bank. However, as a rule of thumb the costs for funding via the eppf will be considerably lower than issuing a stand-alone bond or even establishing an issuance programme. The more you use it the lower the costs get. It will also be considerably faster.