Firms must give 100% cover to list bonds: Sebi

The Securities and Exchange Board of India Sebi on Monday made it mandatory for companies seeking listing of corporate bonds and other debt instruments to maintain adequate security cover for them at all times.

The 100 per cent security cover for listed debt instruments will have to be provided by listed as well as unlisted companies, Sebi, the market regulator, said while issuing the guidelines for listing agreement for debt securities.

"The issuer shall ensure, create and maintain security ensuring 100 per cent security cover for listed secured debt securities at all times and ensure that charges on the assets are registered," the market regulator said.

Sebi further said that while listed companies will have to make minimal disclosure while seeking listing of debt instruments, the unlisted companies will be required to provide detailed disclosures.

Debt securities include corporate bonds, government bonds, certificate of deposits, municipal bonds and other non-convertible debt instruments.

A company whose equity is listed on stock market, the regulator said, will have to make 'minimal incremental disclosures related to the debt security . . . since large amount of information is already in public domain."

The agreement has been prepared by Sebi in consultation with the National Stock Exchange and the Bombay Stock Exchange.