Cayman Islands: Why List Structured Debt On The Cayman Islands Stock Exchange?

The CSX is a well established and internationally recognized stock exchange located in one of the world’s largest financial services centers. It is one of the leading offshore exchanges for the listing of structured debt offerings, which represent nearly one-quarter of its approximately 1,300 listings. These debt listings, often offered through special purpose vehicles (SPVs), include asset-backed and credit-linked securities, CDOs, CLOs, Eurobonds and related programs.

Advantages to listing a structured debt offering on the CSX include:

Credibility – The CSX is a well-regulated exchange, evidenced by its status as an affiliate member of IOSCO and as the only offshore exchange that is an affiliate member of the Intermarket Surveillance Group, a surveillance focused group of over 30 exchanges from around the world, including all US equity and derivatives exchanges (for further details see "Recognitions and Affiliations" on www.csx.com.ky). Listing on the CSX provides an unhindered opportunity to market an offering to institutional investors who may face legal or regulatory constraints on investing in unlisted securities.

Tax Advantages – The CSX is the only offshore exchange in a North American time zone that has UK Inland Revenue recognized status whereby UK investors can receive interest and dividend payments tax free.

Flexibility – CSX listing rules are easy to understand and commercially driven. They are tailored (1) to accommodate the latest structures and products, with the ability to waive the application of rules in appropriate circumstances, and (2) to meet the needs of issuers who market their offerings to institutional and high net worth investors, emphasizing the disclosure of all relevant information without imposing unnecessarily onerous conditions and restrictions. For example:

• the CSX does not require a listing agent for a structured debt offering;

• audited financial statements normally are not required to obtain a listing of structured debt or annually as a continuing obligation;

• disclosure requirements are decreased significantly for both asset-backed and credit-linked securities if CSX staff are satisfied that the information necessary to form a reasoned opinion about the value of the underlying assets is publicly available;

• a new listing document need not be filed to list a tranche or series of securities under a debt program not listed on the CSX, provided that program has been approved by another recognized exchange;

• securities may be issued under a debt program for up to 5 years; and

• the provisions of EU directives, including the EU Prospectus Directive, do not apply.

Efficiency – CSX staff fast track all listings applications and are committed to meet each issuer’s listing deadline. The listing application process is completely electronic, enabling staff to complete a listing within several days of receiving the initial draft listing document. There is no enhanced fee for speedy handling of new listings. Listings staff understand the time pressures that govern the issues brought for listing and ensure that documents are processed quickly to accommodate issuers’ specific needs and timetables.

Price Leadership – The listing fee for a structured debt offering is US$3500 plus an annual fee of US$1500. The annual fee increases to US$2500 for a debt program, plus US$1500 per series issued under the program.

All CSX listing rules and other regulations are accessible for review on the CSX website at www.csx.com.ky

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.