Cross-border issuance calls for partnership


Companies are becoming increasingly aware of international opportunities in terms of capital structure and investor reach. Leading legal adviser Gorrissen Federspiel regularly deals with the technical and legal complexities in the growing field of cross-border issuance.

Capital markets are increasingly international in nature. Initiatives in Europe such as the CSD (Central Security Depository) Regulation and the Shareholder Rights Directive support a common international marketplace, but company law and securities regulation are still primarily subject to national legislation. The capital markets practice at Danish law firm Gorrissen Federspiel sees increasing internationalisation of its business, and with that comes greater complexity. Customary equity issuance by a Danish company under Danish law on the Danish stock exchange is a structured process whereby the dialogue with the CSD is limited, since the technical infrastructure is already known to the participants. In contrast, cross-border issuance has a number of more complex technical and legal aspects which make closer partnership with CSDs highly relevant.

Cross-border issuance on the rise

“We now have more Danish companies considering listing abroad, and foreign companies looking at Denmark as a listing venue, than ever before. The number of cases is still limited, but there are always one or two ongoing client projects that involve cross-border issuance and international set-ups,” says Rikke Schiøtt Petersen. She is head of the capital markets practice and partner at Gorrissen Federspiel, where she primarily deals with securities law, M&A, corporate law and corporate governance.

“In terms of cross-border issuance, we have a very good working relationship with VP Securities. They are a strong and knowledgeable partner when it comes to more complicated set-ups. This involves more than getting the technical connection from CSD to CSD right. I appreciate our informal discussion of both legal and technical issues, so that we can advise our clients on the best possible solution,” she says.

VP Securities has been part of solutions for both bonds and shares in cross-border set-ups crossing the Danish border in both directions. The philosophy is that the financial infrastructure should support the capital market and help companies to attract a transparent and effective flow of capital. As all securities are dematerialised, this is primarily a technological set-up, with a set of building blocks to be assembled according to the legal differences involved in cross-border securities trading.

Communication is key

The capital market practice at Gorrissen Federspiel is a well-reputed leading player in the Danish market and holds a strong record for demonstrated excellence. For decades, Gorrissen Federspiel has been a top securities practice representing issuers, underwriters and other market participants, as well as investors and management. In assisting Danish and foreign industrial and financial clients, Rikke Schiøtt Petersen appreciates the communication aspects of international set-ups, since international advisory teams, with banks, law firms and CSDs, need an understanding of Danish law and securities infrastructure.

At Gorrissen, we frequently invite VP to take part in the early stages, to give an in-depth explanation of the specific aspects of the Danish model. In many cases, it has proved valuable for international partners and counterparties to learn about this directly from the CSD. When we have the business and the CSD proactively engaged at the table, the process will be faster and leaner

Rikke Schiøtt Petersen, Partner at Gorrissen Federspiel

Deep knowledge

Rikke Schiøtt Petersen has been a partner at Gorrissen Federspiel since 2006, and she has seen a wide variety of cross-border issuances involving both Danish and foreign companies, and including investor reach in many markets. Different national standards, different legislation and different technical capabilities can make cross-border issuance complex, and advice on the best way to achieve the client’s objectives may call for deep knowledge and a degree of creativity. VP has been a strong partner in cutting through the complexity, and for Gorrissen Federspiel this is all about helping clients to achieve their goals in the most cost-efficient way.

We’re happy to assist legal experts like Gorrissen Federspiel in the early stages of the process. Even though the technical set-up is mostly viewed as an operational implementation of the business goal in a cross-border project, infrastructure can still be the factor determining whether a project is viable or not. By bringing infrastructure to the table at an early stage, top advisers can add value and even find a way that may have been hidden by the technical and legal complexities associated with cross-border issuance.

Flemming Merring, Head of Issuer Services at VP

Gorrissen Federspiel has represented many leading underwriters and many Danish issuers and, during the past decade, the law firm has also been involved in significant equity and debt offerings and larger IPOs.