Debentures

Debentures

Debentures originated from public offerings may be admitted to trading on the BM&FBOVESPA through the listing process environment.

Information and documents necessary for debentures listing and issuers registration are available on session Fixed Income.

Issuers and underwriters can count on the BM&FBOVESPA distribution services for their debenture public offerings. These services are available in packages and the choice of service level (i.e., the choice of one of the service packs) is a decision of the company and of the offer coordinators, according to the characteristics and objectives of the offer. Based on its technical and operational experience, BM&FBOVESPA may provide guidance on the most appropriate service. For instance: Package 1 without broker pool is often used in restricted offerings regulated by CVM Instruction 476, while Package 3 is usually used in offerings with extensive placement efforts governed by CVM Instruction 400, because they can rely on broker pool and other services.

Detailed information about the services available to issuers debentures can be obtained on session: Fixed income.

Learn more about debentures, please visit the session Products.

Issuing advantages

When issuing debentures, companies can use the funds raised for financing their project, restructuring their liabilities, increasing their working capital among others.

Fundraising for investments:
an alternative to bank financing, extending the liabilities and opening a broad spectrum of potential investors to the company, mainly in Brazil, but also abroad.

Liability restructuring:
the debentures are used to consolidate the company’s debts of various natures, with the advantages of reducing their average cost (including the cost and complexity of debt administration), extending and adapting their profile and significantly decreasing the guarantees used for fundraising.

Security flexibility:
the debenture is a very flexible bond that enables the assembling of medium- and/or long- term operations according to the needs of the issuer. They are extremely flexible funding instruments in terms of guarantees, term, convertibility into shares, and compensation, as well as offering the possibility of renegotiation or changing its characteristics in the General Debenture Holders Meeting (AGD, in portuguese).

Speed in fundraising:
with the simplified registration procedure and the possibility of registering a Distribution Program at CVM, it is possible for companies to quickly issue debentures and fundraising actions, for example, at a time when interest rates are attractive.

Entering in the stock market:
the launching of debentures can be considered a preliminary stage to a full IPO carried out through the issuance of shares, especially in the case of convertible debentures.These debentures have a convertibility clause laying down conditions, price and period for which the debentures to be converted into shares.

How to issue

Only corporations can issue debentures, and private corporations can only issue debentures regulated pursuant to CVM Instruction No. 476, i.e., from public offerings distributed with restricted efforts, which allow a demand of a limited number of professional investors. On the other hand, publicly traded corporations can have public offerings distributed with extensive efforts, pursuant to CVM Instruction No. 400, which enables unlimited demand of investors, including retail investors. For more information on the public issuance of debentures, access the section Regulation.

The process of issuing debentures with restricted distribution efforts is faster and takes, on average, 8 weeks from the decision of issuing to the announcement of closure of the offer sent to CVM. The process of issuing debentures with extensive distribution effort takes, on average, 15 weeks.

Understand what happens in each of the steps:

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