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  • Bartłomiej Dmitruk

The use of Virtual Data Room for the process of issuing and servicing bonds

More and more private and public companies are reaching for financing in the form of bond issues. Bonds have a long history both on the foreign and Polish market, and are an effective and flexible form of financing enterprises, municipalities or projects. Each process of bond issue and its handling in time to the maturity and final repayment requires proper preparation and communication with advisors and investors.


Bond issue process - basic steps for an entity considering a bond issue


The bond issue process can be divided into several basic steps / milestones:


Analysis and evaluation of the company


Analysis and evaluation of the company's business, financing needs, current financial situation and results as well as the ability to generate cash flows in terms of servicing and repaying additional debt, analysis of the possibility of establishing security for the issue of bonds. This step usually requires the involvement of a bank or brokerage house that assesses the company's creditworthiness.


The concept and structure of the bond issue


Assessment of the possibility of raising capital on the market, identification of offer recipients (institutional / individual investors), selection of the offer mode (private or public), issue structure (program or one-time issue), determination of parameters (offer size, maturity, collateral, repayments, interest) and the broadcast schedule. This stage usually requires the involvement of a financial advisor (bank or brokerage house) and a legal advisor.


Preparation of the bond issue


Preparation of the offer document (depending on the procedure and size of the offer - purchase proposal with the terms of the issue, information memorandum, issue prospectus), preparation of materials for investors, preparation of a possible promotional campaign, in the case of a public offering, preparation of notifications and necessary applications to the Financial Supervision Authority and preparation of registration with the regulator. This stage usually requires the involvement of a financial advisor (bank or brokerage house), legal advisor IR (Investor Relations) and possible communication with the regulator.


Bond offering process


Organization and preparation of the bond offering process along with the allocation and settlement of the bond issue. The offering process ends with the book-building of the company's bonds, setting the issue price and the final allocation of bonds to investors. On this basis, the issue of bonds is settled and the money is transferred from investors to the company's account. This stage requires the involvement of a financial advisor (bank or brokerage house), legal advisor and communication with investors and the regulator.


Introduction to trading on the public market


In case of public or private offerings that are introduced to trading on the public market, it is necessary to prepare for the introduction of bonds to trading on regulated market and ongoing authorized advice on the fulfillment of disclosure obligations.


Service and repayment of bonds until maturity


The issue of bonds is only the beginning of its life until maturity and final repayment. It is often a period of several years during which the company is required to pay interest and the nominal value according to a specific schedule, but also to report certain events and appropriate communication with investors. It happens that the issuer has to ask for a change of selected conditions or the bond requires refinancing or restructuring.


Communication with the use of Virtual Data Room in the issue process and during bond service


Communication in the process of preparing and placing the bond issue


The process of preparing a company for the issue comes down to carrying out due diligence as well as preparing documentation and the placement process. In practice, this means ongoing communication between the Management Board and the designated team of the company with advisors and, in the final stage, with investors. Virtual Data Room is the perfect tool to conduct such a process in a professional, safe and confidential manner.


In VDR, you can carry out the following work related to this process:


  • company due diligence process by DCM (Debt Capital Markets) advisors, banks, brokerage houses and legal advisers;

  • preparation of the structure and transaction documentation;

  • providing documentation and presentation to investors;

  • conducting the Q&A process with investors prior to the placement of issues;

  • book-building process and acceptance of bond purchase orders;

  • settlement and documentation related to the completion of the bond issue.


Communication during the service of bonds to the maturity


The issuer is often obliged to periodically report the results, covenants and other important events in addition to the timely repayment of interest and nominal value of the bond. In the case of a private company, this means an additional information effort that must be managed and communicated in an appropriate manner. Reliable, timely communication with investors is crucial, especially in cases where bond repayment is at risk. The processes of changing the terms of bond issue, restructuring or refinancing are a perfect example when proper communication between the issuer and investors can be crucial in reaching an agreement and often maintaining the company's liquidity. In such processes, DCM, legal and IR (Investor Relations) advisers are usually involved outside the company and conduct an active dialogue with investors. In such cases, it is also worth using the functionalities of the Virtual Data Room to conduct the communication process in a safe, confidential and effective manner.


Virtual Data Room is an excellent solution supporting the following processes during the "life" of the bond:


  • ongoing communication with investors (especially institutional ones) and providing them with the required information on time and in a safe environment;

  • change of bond issue terms;

  • refinancing bonds before maturity;

  • restructuring of the program / bond issue or the entire financing of the company;

  • bankruptcy processes of issuing companies.

Why is it worth implementing a Virtual Data Room when issuing bonds?


Virtual Data Room is an excellent tool for professional communication on capital markets. This solution is known to investors and advisors related to the bond or stock market. The implementation of VDR in a company that plans to issue emissions has a number of positive aspects, including:


  • cooperation and communication with advisers in a safe environment, available 24/7;

  • quick, easy and safe exchange of important confidential documents on a simple, intuitive platform;

  • managing permissions and access to documents as well as organizing design work in a transparent manner;

  • effective and efficient communication with investors through Q&A;

  • the ability to conduct the bond issue and service process in one place, under the full control of the company;

  • elimination of paper processes and physical meetings to the necessary minimum

  • creating a professional image by implementing VDR, which is a tool recognized by advisors and investors for conducting transactions on the capital market.

About us


DealDone is a specialized company that offers high-quality products in the field of information and data security. The DealDone team consists of people with many years of international experience in investment banking, investor relations, technology and cybersecurity. We offer services and software in the field of modern technologies for the circulation of confidential information, classified information, sensitive data and digitization, security, encryption and sharing of data and documents inside and outside the organization.


DealDone independently developed and introduced for sale the Virtual Data Room SECUDO solution. VDR SECUDO is a platform for secure exchange and processing of confidential information offered in the Software-as-a-Service model for business clients, in the form of virtual data rooms.

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