The role of a bondholders’ representative (BR) improves the protection of bondholders’ rights and provides additional oversight of the execution of the issuer’s bond obligations. Let’s look at some of the practical aspects of BR activities.

Non-default period of a deal

The main BR responsibility during a regular deal period (when there is no default or signs of it) is to oversee the issuer’s activities and inform third parties. The law offers no list of events that a BR should control.

Parent company guarantees and performance bonds are typically used in the construction and engineering industries to provide a developer with some security in the event that the contractor breaches the building or engineering contract or, in some circumstances, upon the contractor's insolvency.

In the current economic climate, contractor default is, unfortunately, even more prevalent in the construction and engineering industries, and so the issues surrounding parent company guarantees and performance bonds are very much in focus for developers.