Sovereign Bond Issues During the Pandemic: Practical Considerations for Debt Management Offices

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Introduction

Arnold & Porter has been advising sovereign and corporate issuers on capital markets issues throughout the COVID-19 crisis. In this Advisory, we share some practical considerations for Sovereign Debt Management Offices (DMOs) that are considering issuing bonds during the pandemic.

Challenges Associated with Stay-at-Home Orders and Travel Bans

Many of the participants in a bond issuance are operating in a virtual operating status as a result of stay-at-home orders and travel bans. With most countries having declared national emergencies, the effects are felt by all participants: DMO personnel and other government officials, bankers, lawyers, rating agencies, printers and, of course, investors. For the most part, the transition to remote working has been smooth and reflects the investment in information technology infrastructure by all market participants over the years.  

At the same time, issuers have faced unexpected impediments, many of which can be mitigated with advance planning. For example, issuers have experienced atypical delays with financial printers, as many issuers—including sovereigns and multilateral banks—have attempted to access the debt markets at the same time, requiring additional time to be built into the schedule to turn drafting changes or EDGAR-ize a filing. We recommend that DMOs have access to the sovereign's EDGAR codes and the flexibility under their internal authorizations to hire, if necessary, an alternative financial printer.

© Arnold & Porter Kaye Scholer LLP 2020 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.