Ukraine will introduce credit notes into circulation for the first time

The National Securities and Stock Market Commission of Ukraine has registered the issuance of credit notes for the first time. The registration pertains to the "A" series of credit notes issued by LLC "Market Consult Plus" for a total amount of UAH 334 million. This was reported on the commission's website. Officials mentioned that besides the issuer, other market participants have also shown interest in this new financial instrument.

The registered issuance consists of 334,000 registered interest-bearing ordinary (unsecured) credit notes with a total value of UAH 334 million and a nominal value of UAH 1,000 per credit note. The interest rate is set at 5% per annum, and the maturity period is 5 years.

The commission stated that this type of security is being registered by the regulator for the first time. The registration took place within the framework of a pilot project.

"A credit note is an emission derivative security associated with an event related to the solvency of a third party specified in the decision on the issuance of credit notes," explained the regulatory authority.

A credit note obligates the issuer to make interest payments to the holder of such security according to the rate and timeframe determined by the decision on the issuance of credit notes. Repayment is made by the issuer paying the nominal value of the credit note to the holder, provided that no event related to the solvency of the third party specified in the decision on the issuance of credit notes has occurred. In the event of such an occurrence, the holder of the credit note loses the right to receive interest income, and the issuer of the security is obliged to repurchase the credit note at a price determined in accordance with the procedures set forth in the decision on the issuance.

"We hope that this initial experience will be successful, and the results will contribute to popularizing credit notes for attracting necessary resources. The commission is always ready to support the initiatives of participants and promote the introduction of new financial instruments to the market," stated Ruslan Magomedov, the Chairman of the National Securities and Stock Market Commission.