Capital Markets Update: Focus on TISE

This is the first in a new series of brief updates for our clients and contacts with an interest in the capital markets. In this issue we focus on The International Stock Exchange (TISE).

Growth in High Yield

Since its formation, TISE has been a popular venue for listing debt securities to take advantage of the Quoted Eurobond Exemption. These listings are often technical in nature and are intragroup debt with an offshore fund investing into the UK via a listed debt security. Following the introduction of the Market Abuse Regulation in the EU, TISE has seen an increase in High Yield securities listings, as originators who may have previously opted to list on the Luxembourg or Irish Stock Exchanges have elected to use TISE as a non-EU alternative. It was noted at the AFME Annual European High Yield conference in 2018 that TISE’s share of high yield bond listings now accounts for approximately 20% of all high yield bond listings in Europe. We expect to see this proportion continue to rise in 2019 as new issuers automatically opt for TISE as the default choice for a new listing.

Increasing Interest in UK REITS

Another key theme in the last twelve months has been discussion with introducers regarding UK REITs: a UK REIT has the requirement to lists its shares on a recognised European stock exchange and TISE is such an exchange. TISE has seen its market share of UK REITs increase from just over a quarter to nearly a third of all REITs listed. The cost of listing a REIT on TISE is a fraction of that for the LSE, the speed to market is much faster and the ongoing obligations are significantly lighter. So for those REITs which do not require the levels of market liquidity offered by the LSE, TISE is the optimum choice.

Additions to TISE

TISE has introduced a new green market segment, TISE GREEN, designed to encourage the listing of all types of green investments, including bonds, funds and trading companies. TISE also updated its listing rules, effective 1 January of this year. The new listing rules will have minimal impact on most new or existing issuers but the clear distinction between debt listings and equity listings in the new rules, assists listing sponsors such as ourselves in reviewing and applying them.

Recent Listings by Our Team

Our capital markets team has been busy over recent months with a good flow of listing enquiries, working with major international law firms and accountancy firms on some significant new listings on TISE. One issue of note was the admission of three debt securities to the exchange on 21 September 2018, with a total value in excess of £550 million. This was followed by the listing on 23 October of a $250 million loan note issue. Of course, not all TISE listings are of this size; the team here also completed a listing of £5.2 million during the same period.

Key Contacts

If you would like to learn more about our capabilities, please contact our personnel, all of whom are regularly in London.