Although it has undeniable advantages for the Company, the Bond Offering process will involve costs that must be considered.
The total direct cost of the transaction varies depending on the size of the fundraising, the structure of theoffer, the context, and the choice of advisors. It comprises the fees due to the various advisors, including the Placement Financial Intermediary(ies), the stock market operator and the Regulator. To these costs accrue any marketing costs (road shows, media publications, etc.).
Furthermore, indirect costs (such as management time dedicated to the Bond Offering process) should not be underestimated.
Based on financial information available from Portuguese listed companies, the average total cost of a public bond offering tends to be within the range of 1.5% – 4.8% of the total amount of funds raised.
Typically, the larger the offering, the higher the costs in absolute terms. Nevertheless, in relative terms, usually they represent a much smaller proportion of the value of the offer proceeds compared with small-sized offerings.
The main costs of Bond Offering process are as follows: