Industry-led Capital Markets Platform eppf Issues First Bond / Standardisation and Digitalisation of Issuance Reduces Complexity and Costs
December 04, 2017 --
LUXEMBOURG, FRANKFURT AM MAIN, AMSTERDAM, and LONDON, Dec. 4, 2017 /PRNewswire/ -- The european private placement facility (eppf) S.A. (BBG: eppfsa), a new fintech industry utility for bond issuance, has issued its first bond (ISIN: XS1720544474) on behalf of its client DZ BANK AG. After this first successfully concluded inaugural transaction, eppf starts its regular business with clients such as financial institutions, insurance companies, real-economy clients and public-sector entities.
eppf offers its clients a technical and legal platform for issuing bonds, in which most of the steps required for the issuance process like documentation and settlement, are largely standardised with most of the setup work being completed when the client joins – on subsequent transactions this initial work does not need to be repeated so saving on time and cost. The resulting efficiency gains allow issuers to collect (debt) capital on the capital markets at very low transaction costs (for further details on the eppf mechanics, please see "About eppf" below). This allows opens the possibility even for small companies and companies active only from time to time on the capital markets to issue bonds from a volume of EUR 10 million upwards per transaction.
The inaugural issue is a fixed rate note, with a maturity of approximately 2 weeks (commercial paper) and was settled via Clearstream together with the Joint Lead Managers ABN AMRO and DZ BANK and BNY Mellon as paying agent. eppf's first bond was issued out of its Compartment DZ BANK AG and guaranteed by DZ BANK AG, allowing therefore for an investment in the central institution in the cooperative financial network in Germany, rated AA- by Standard & Poor's.
eppf's flexible and modular framework allows for turn-key bond issuance on tight time-scales in a hassle-free environment ranging from
- commercial paper to
- long-running benchmark bonds covering
- private and public deals
- with a listing on a regulated market, multilateral trading facility or without a listing.
In addition to the considerable flexibility and the possibility of modular structuring the short time-to-market as well as the extremely low transaction costs in comparison to other capital markets instruments are paramount.
eppf partners comprise amongst others: ABN AMRO, BNY Mellon, Berenberg, Commerzbank, DBRS, DZ BANK, Euler Hermes Rating, Landesbank Baden-Wuerttemberg (LBBW), Luxembourg Stock Exchange and Luxembourg Green Exchange, Sanne Group, Simmons & Simmons, The Law Trust Limited, Tradition and Trad-X, White & Case.
Robert Koller, Executive Chairman of eppf, said: "After an intense period of development, I am pleased that eppf has achieved this milestone launching its inaugural issue and becoming an operational platform. We have now started a revolution in debt capital markets enhancing the standardisation of bond issuance. The platform excels in being easy to use, the savings in comparison to traditional bond issuance and the high degree of structural flexibility and speed. eppf's focus is on quality, providing market access to new borrowers and enhancing the capabilities of existing borrowers by way of digitalisation, standardisation and automation leading to cost savings for all stakeholders. I would like to thank all of our partners for their help and support and look forward to working with them and others in the future."
Frank Scheidig, Global Head of Senior Executive Banking at DZ BANK, commented on using eppf: "We have a number of clients, for whom a traditional bond issuance is economically unattractive, although they could be quality issuers on the capital markets. We can now provide a solution to these clients by using eppf to access the capital markets to raise funds. In addition, for many bond investors the access to additional issuers is a welcome expansion of the investment universe. The inaugural bond issue has proven that the eppf platform works technically flawlessly."
Mathijs van der Horst, Head of Debt Syndicate at ABN AMRO, said: "The eppf platform provides medium sized companies access to the debt capital markets in a cost-efficient manner. ABN Amro embraces innovative platforms such as eppf and we look forward to providing access to a variety of issuers to this new way of capital markets funding."
Joachim Heppe, Deputy Head DCM Bonds & Head Syndicate at Commerzbank said: "In close co-operation with eppf we have created a product which provides a funding alternative in the bond markets for a broader client base. The eppf platform facilitates an automated and standardised execution process for issuers. At the same time investors profit from a wider range of investment opportunities in the debt capital markets."
Louis-Maël Cogis, Partner and Country Head at Simmons & Simmons Luxembourg, commented on advising eppf: "It has been a long and challenging process but with some continued hard work, the eppf platform is now operational. This is a fantastic project and we have been pleased to be able to support the creation of this platform and the executive management of eppf during the past years. This platform is a fantastic tool for the development of the financing of companies across Europe."
Dan Marcus, CEO of TradX, commented on using eppf: "Trad-X advocates issuance transparency and standardisation. We think the entire issuance process should provide both issuers and investors with confidence that the documentation and execution elements are fully compliant and in line with industry wide best practices. We support eppf in its vision to help the market gain this confidence."
Karsten Woeckener, Partner in the corporate finance are at White & Case in Frankfurt, commented the collaboration with eppf as follows: "eppf offers various advantages in comparison to traditional bond issuance platforms. We are very pleased with the inaugural issuance, which has been the result of very intense structuring, negotiating and documentation processes. I am convinced that further issues will now follow."
eppf, which is regulated by the Luxembourg CSSF, complies with the key principles of the Capital Markets Union and is the only capital-markets-as-a-service (CMaaS) platform of its kind. It offers a turn-key solution for borrowers, whether corporates, public-sector entities or others allowing for the issue of bonds using its innovative and flexible structure of a ring-fenced Luxembourg compartment company. eppf gives borrowers the same functionalities currently available only to large sovereign issuers at a fraction of the cost allowing access to markets for capital raises from EUR 10 million upwards.
eppf sets a new standard for bond issuance in Europe and worldwide creating a truly integrated, borderless, frictionless and fully fungible debt market.
eppf is an independent financial platform, bringing harmonisation and standardisation to bond markets without losing flexibility, through digitalising and automating processes and stringent quality controls. eppf provides enormous cost and time savings to all stakeholders bringing time-to-market for first-time issuers down to as little as a few weeks and in the case of repeat issuers to a settlement target of T+1. The eppf platform builds on existing and proven mechanisms, allowing clients to maintain their current banking relationships. It has been developed with the participation from market stakeholders from a number of different countries, including major investment banks, investors, advisers, issuers and various regulators.
With the assistance from a broad panel of market participants, eppf has developed standard documentation flexible enough to suit most debt issuers. eppf integrates all steps for issuing debt securities, mapping the entire value chain of a bond issuance for the first time in a fully digital and automated environment. In addition to cost savings and reduced time-to-market for market participants, created by the common use of eppf as an industry utility, eppf offers two innovative pricing models, new in capital markets. For the occasional borrower eppf provides a Pay-As-You-Print model where costs only occur when an issuance actually happens. For frequent issuers, eppf offers the ability to reduce costs per bond further through an annual subscription covering all issuances during the year.
The eppf platform benefits investors through increased liquidity, quality controls, standardised documentation and a central data hub allowing them to analyse their investments in an ongoing way, never previously available for bond market investors.
eppf's core team is made up of experienced senior financial professionals from the financial, banking and legal sector with over 200 years experience between them in major international investment banks and law firms.
For further information, visit www.eppf.eu.
About ABN AMRO
ABN AMRO is a Dutch bank for retail, corporate and private banking clients. We are a relationship-driven, knowledgeable and digitally savvy bank, active in Northwest Europe and with expertise in selected sectors globally. Headquartered in Amsterdam, ABN AMRO is located in 20 countries and employs over 20,000 people worldwide.
Please visit us at www.abnamro.com.
About DZ BANK
DZ BANK AG is the second largest bank in Germany. It is the central institution in the cooperative financial network and serves approx. 1,000 cooperative banks (and their 12,000 branch offices), each of which is a stakeholder in DZ BANK AG and which together own the majority stake. As "DZ BANK. Die Initiativbank", it is also active as a corporate bank and is the holding company for the specialised service providers in the DZ BANK Group:
Bausparkasse Schwäbisch Hall (building society), DG HYP (commercial real estate finance), DZ PRIVATBANK, R+V Versicherung (insurance company), TeamBank (consumer finance), Union Investment Group (asset management), VR Leasing Group, WL BANK (real estate and public sector financing) and various other specialised institutions. With its extensive range of financial products and services, the DZ BANK Group supports the local cooperative banks in Retail Banking, Corporate Banking, Capital Markets and Transaction Banking. (www.dzbank.de).
Commerzbank is a leading international commercial bank with branches and offices in almost 50 countries. In the two business segments Private and Small Business Customers, as well as Corporate Clients, the Bank offers a comprehensive portfolio of financial services which is precisely aligned to the clients' needs. Commerzbank finances 30% of Germany's foreign trade and is leading in financing for corporate clients in Germany. Due to its in-depth sector know-how in the German economy, the Bank is a leading provider of capital market products. Its subsidiaries Comdirect in Germany and mBank in Poland are two of the world's most innovative online banks. With approximately 1,000 branches, Commerzbank has one of the densest branch networks among German private banks. In total, Commerzbank serves more than 18 million private and small business customers, as well as more than 60,000 corporate clients, multinationals, financial service providers, and institutional clients. The Bank, which was founded in 1870, is represented at all the world's major stock exchanges. In 2016, it generated gross revenues of €9.4 billion with approximately 49,900 employees.
About Landesbank Baden-Württemberg (LBBW)
Landesbank Baden-Württemberg (LBBW) is both a medium-sized universal bank and the central bank of the savings banks in Baden-Württemberg, Saxony and Rhineland-Palatinate. With total assets of EUR 244 billion and around
11,000 employees (as of 31 Dec. 2016), LBBW is one of the largest banks in Germany. Its core activities are the business with corporate customers, in particular small and medium-sized enterprises and the private customer business, as well as savings banks. A further focus is placed on real-estate financing as well as the customer-oriented capital market business with banks, savings banks and institutional investors. Together with its regional customer banks Baden-Württembergische Bank (BW-Bank), Rheinland-Pfalz Bank and Sachsen Bank, LBBW services its private and corporate customers in about 180 offices – for many of these customers, they have been the main banker for many years. Specialised subsidiaries such as leasing, factoring, real estate, venture capital or asset management round out the product and service range of LBBW group.
About BNY Mellon
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of Sept. 30, 2017, BNY Mellon had $32.2 trillion in assets under custody and/or administration, and $1.8 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.
About Simmons & Simmons
Simmons & Simmons is a leading international law firm with fully integrated teams working through offices in Europe, the Middle East and Asia, bringing experienced professionals to some of the most active growth markets today. Our focus on a small number of sectors means we are able to understand and respond to our clients' needs. Our industry sectors are: Asset Management & Investment Funds, Financial Institutions, Life Sciences and Telecoms, Media & Technology (TMT). We also focus on the E&I market, in particular through our international projects and construction teams. We have a track record for innovation and delivering value to clients through new ways of working.
Tradition is the interdealer broking arm of Compagnie Financière Tradition and one of the world's largest interdealer brokers in over-the-counter financial and commodity related products. Represented in over 28 countries, Compagnie Financière Tradition is listed on the Swiss stock exchange.
Trad-X is Tradition's multi-asset class trading platform for OTC derivatives.
- Trad-X is fuelled with firm irrefutable (not indicative) prices all day every day to more than 320 of the most liquid interest rate swap price points in market size covering USD, EUR and GBP swaps
- Provision of full audit trail and order book replay capability to confirm validity of price referenced directly from our trading screen
- Direct real-time provision of Trad-X trading data on to our reference screen with no ability to move screen by indicative voice pricing
- Huge depth of liquidity on every tenor due to fact that at least 12 of the largest banks in the world stream in to Trad-X at least 18 streams
- Hybrid capability provide symbiosis and combination of voice and electronic liquidity pools
About White & Case
White & Case LLP is a leading global law firm with 41 offices in 29 countries, in markets that matter today. About 200 lawyers, tax advisers and notaries in Berlin, Düsseldorf, Frankfurt am Main and Hamburg operate in Germany (www.whitecase.com).
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SOURCE eppf S.A. - european private placement
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