NewsAllen & Overy advises on a unique domestic bond issuance by SAZKA Group

Allen & Overy has announced that it advised J & T BANKA, a.s., as co-ordinator and joint lead manager, Česká spořitelna, a.s., Komerční banka, a.s. and UniCredit Bank Czech Republic and Slovakia, a.s., as joint lead managers, and J&T IB and Capital Markets, a.s. as arranger, on the domestic, Czech Koruna-denominated standalone bond issuance of SAZKA Group a.s.. SAZKA Group a.s. issued bonds in the total nominal value of CZK6 billion. SAZKA Group is one of the fastest growing European lottery companies. It operates in Austria, Cyprus, Czech Republic, Greece, and Italy.

The transaction is particularly novel and unique in that the prospectus of these bonds is the first prospectus approved by the Czech National Bank after the new Prospectus Regulation took full effect in July this year. It is also the first transaction on the Czech market with bonds issued as unsecured obligations on the issue date, whilst its terms and conditions contain issuers covenant to provide, subject to certain conditions, security for the bonds and, at the same time, appoint a security agent. For that purposes, the terms and conditions of the bonds set out a full spectrum of future rights and obligations of the security agent as creditor and secured creditor vis-à-vis the issuer, security providers and bondholders.

The transaction required complex structuring and very detailed description of financial obligations and alternative performance measures in the prospectus of the bonds. In this regard, the prospectus of the bonds goes significantly beyond what is required or customarily included in a prospectus of a bond issuer on the Czech market. The goal of the alternative financial and performance measures is to better describe in the prospectus the business activities of the whole group which co-owns, but not necessarily always controls, its lottery and gaming subsidiaries in number of countries across Europe. Due to the rules introduced in the new Prospectus Regulation, the approval of the prospectus further required extensive amendments to the standard set of risk factors, both in relation to the issuer and its activities, and in relation to the bonds.

The transaction team was led by counsel Petr Vybíral, who worked closely with associate Tomáš Kirner and other lawyers from A&O Prague and Bratislava offices.