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The proposal now up for consultation, to exempt issuer buy-backs of quoted bonds from the unsolicited offer restrictions, is a good idea for the market, says Chapman Tripp finance partner Luke Ford.
In such a buy-back, an issuer (or its subsidiary or holding company) repurchases its own quoted debt securities before their maturity. This may be useful in a range of circumstances, including as part of a rollover into new bonds or an exercise to reduce the issuer’s overall debt.
The Financial Markets Authority (FMA) released the consultation paper on Friday. It is part of a broader package of New Zealand capital market regulatory reforms that NZX has been collaborating on with the Minister of Commerce, the Ministry of Business, Innovation and Employment (MBIE) the FMA and market participants, including Chapman Tripp.
“We strongly support the proposed exemption as it would remove barriers that currently restrict issuers from being able to undertake effective rollovers and other liability management exercises in relation to their quoted debt.
“It is also consistent with existing rights for foreign-incorporated issuers, as well as issuers in relation to repurchases of their shares,” Luke said.
The exemption would provide investors with more tailored and suitable disclosures within timeframes that better reflect debt market conventions and market conditions. Proposed conditions include the issuer providing a cleansing notice to the licensed market operator.
Submissions on the consultation close on Friday, 25 July 2025.
