Episode 65 · 2021-02-23 · 34:27 · Original in Finnish
The Bar Association's Bond Day | Tero Tuomisto and Sami Miettinen | Negotiator 65
Originally published as “Lakimiesliiton Bondipäivä | Tero Tuomisto Sami Miettinen | Neuvottelija 65”
This episode is a recording of the closing presentation at the Finnish Bar Association's Bond Day, in which Sami Miettinen works through the structures of the Nordic bond market and how they are used when terms have to change. The talk sets out the four segments of Finland's bond market, the role of the bondholders' representative — the trustee — and the written procedure by which terms are amended in roughly 15 banking days without gathering anyone into a room. The practical cases run from Kojamo's rise from unlisted issuer to an EMTN programme, through Containerships' high yield bond and the debt amendment programme Stockmann pushed through in the middle of the crisis, to Elematic, where bondholders cut their own claim from 35 million to 15 million in order to save the company's value without bankruptcy. In the closing part Miettinen compares direct lending with bank debt and bonds, shows that its promised speed has not materialised, and presents the tokenisation of commercial real estate debt, where the same trustee practices move onto a blockchain and into smart contracts. Tero Tuomisto then draws the whole training day together. Miettinen discloses his interests at the start of the talk: he is a member of the advisory board of Realstocks.io and a former CEO of Nordic Trustee.
Watch and listen
Key moments
- 00:00 — Successful amendments to bond terms as the highlight
- 00:59 — The day's final presentation begins
- 01:31 — Miettinen introduces himself and discloses his interests
- 02:04 — The three themes of the presentation
- 02:32 — Kojamo from unlisted issuer to an EMTN programme
- 03:47 — Containerships and the high yield bond
- 04:26 — Stockmann and an amendment programme pushed through mid-crisis
- 05:36 — The four segments of Finland's bond market
- 06:06 — Municipalities issue at negative rates
- 06:22 — Hybrid bonds as a Finnish peculiarity
- 06:46 — Large issuers reached the market, small ones did not
- 07:04 — The collective action clause in sovereign bonds
- 07:40 — The agent in the corporate loan market
- 07:58 — Why a lower decision threshold serves the issuer
- 08:22 — Listed, private placement or direct lending
- 08:50 — The life cycle of a debt instrument
- 09:07 — Conditions precedent before the money moves
- 09:39 — Covenants, payments and the written procedure
- 10:23 — Why an agent is worth having in good weather too
- 10:50 — The amendment process takes 15 banking days
- 11:14 — Stamdata and the voting thresholds
- 11:46 — Amending the terms in practice
- 12:05 — Examples of amendments, and the special act
- 12:14 — Raising the interest rate floor without a vote
- 13:35 — When enterprise value falls below the face value of the debt
- 14:15 — Waterfall theory: who loses what
- 14:46 — Practice departs from theory
- 15:18 — In a negotiation you get what you negotiate
- 15:28 — Elematic: from 35 million to 15 million
- 16:37 — Saving value without bankruptcy
- 17:04 — The future of finance on old structures
- 17:27 — What direct lending is and what it replaces
- 18:18 — Where direct lending is competitive
- 18:54 — A trillion-euro market, and Finland lagging
- 19:27 — Who invests in private debt
- 20:09 — Covid shifted the focus to technology and healthcare
- 20:47 — The bleeding edge: tokenisation
- 21:09 — Direct lending's promise of speed did not materialise
- 22:19 — The investor field is wide
- 22:54 — The commercial real estate market and super core
- 23:46 — Why direct lending can grow its share
- 24:32 — The same practices, tokenised
- 25:12 — What if real estate debt could be traded
- 25:42 — A creditor collective split into small pieces
- 26:05 — A marketplace and smart contracts
- 26:40 — Summary of the presentation
- 26:59 — Question: does due diligence lengthen the timetable
- 27:49 — Documentation, the LMA and the security package
- 28:47 — Tuomisto's summary of the training day
- 30:44 — Green bonds and sustainability-linked bonds
- 31:47 — The prospectus, disclosure and marketing material
- 32:10 — Amendments to bond terms are no longer feared
- 32:57 — Closing the day
Summary
This episode is a recording of the closing presentation at the Finnish Bar Association’s Bond Day, in which Sami Miettinen works through the structures of the Nordic bond market and how they are used when terms have to change. The talk sets out the four segments of Finland’s bond market, the role of the bondholders’ representative — the trustee — and the written procedure by which terms are amended in roughly 15 banking days without gathering anyone into a room. The practical cases run from Kojamo’s rise from unlisted issuer to an EMTN programme, through Containerships’ high yield bond and the debt amendment programme Stockmann pushed through in the middle of the crisis, to Elematic, where bondholders cut their own claim from 35 million to 15 million in order to save the company’s value without bankruptcy. In the closing part Miettinen compares direct lending with bank debt and bonds, shows that its promised speed has not materialised, and presents the tokenisation of commercial real estate debt, where the same trustee practices move onto a blockchain and into smart contracts. Tero Tuomisto then draws the whole training day together. Miettinen discloses his interests at the start of the talk: he is a member of the advisory board of Realstocks.io and a former CEO of Nordic Trustee.
Chapters
- 00:00 — Successful amendments to bond terms as the highlight
- 00:59 — The day’s final presentation begins
- 01:31 — Miettinen introduces himself and discloses his interests
- 02:04 — The three themes of the presentation
- 02:32 — Kojamo from unlisted issuer to an EMTN programme
- 03:47 — Containerships and the high yield bond
- 04:26 — Stockmann and an amendment programme pushed through mid-crisis
- 05:36 — The four segments of Finland’s bond market
- 06:06 — Municipalities issue at negative rates
- 06:22 — Hybrid bonds as a Finnish peculiarity
- 06:46 — Large issuers reached the market, small ones did not
- 07:04 — The collective action clause in sovereign bonds
- 07:40 — The agent in the corporate loan market
- 07:58 — Why a lower decision threshold serves the issuer
- 08:22 — Listed, private placement or direct lending
- 08:50 — The life cycle of a debt instrument
- 09:07 — Conditions precedent before the money moves
- 09:39 — Covenants, payments and the written procedure
- 10:23 — Why an agent is worth having in good weather too
- 10:50 — The amendment process takes 15 banking days
- 11:14 — Stamdata and the voting thresholds
- 11:46 — Amending the terms in practice
- 12:05 — Examples of amendments, and the special act
- 12:14 — Raising the interest rate floor without a vote
- 13:35 — When enterprise value falls below the face value of the debt
- 14:15 — Waterfall theory: who loses what
- 14:46 — Practice departs from theory
- 15:18 — In a negotiation you get what you negotiate
- 15:28 — Elematic: from 35 million to 15 million
- 16:37 — Saving value without bankruptcy
- 17:04 — The future of finance on old structures
- 17:27 — What direct lending is and what it replaces
- 18:18 — Where direct lending is competitive
- 18:54 — A trillion-euro market, and Finland lagging
- 19:27 — Who invests in private debt
- 20:09 — Covid shifted the focus to technology and healthcare
- 20:47 — The bleeding edge: tokenisation
- 21:09 — Direct lending’s promise of speed did not materialise
- 22:19 — The investor field is wide
- 22:54 — The commercial real estate market and super core
- 23:46 — Why direct lending can grow its share
- 24:32 — The same practices, tokenised
- 25:12 — What if real estate debt could be traded
- 25:42 — A creditor collective split into small pieces
- 26:05 — A marketplace and smart contracts
- 26:40 — Summary of the presentation
- 26:59 — Question: does due diligence lengthen the timetable
- 27:49 — Documentation, the LMA and the security package
- 28:47 — Tuomisto’s summary of the training day
- 30:44 — Green bonds and sustainability-linked bonds
- 31:47 — The prospectus, disclosure and marketing material
- 32:10 — Amendments to bond terms are no longer feared
- 32:57 — Closing the day
Watch
The recording lives on the Neuvottelija channel: Lakimiesliiton Bondipäivä | Tero Tuomisto Sami Miettinen | Neuvottelija 65. A Finnish edition of this episode is published at www.neuvottelija.fi.
People and topics
Guests: Tero Tuomisto
Topics: Investing & Markets M&A & Exits