In recent years, numerous German companies have issued Nordic Bonds. Booster Precision Components and LR Health & Beauty are currently undergoing restructuring. Given the challenging economic climate, restructuring at other companies is also likely to be necessary. Christoffer Andersson, CEO Sweden & Finland at Nordic Trustee, explains the bond restructuring process for Nordic Bonds in this interview.
BOND MAGAZINE: How is the restructuring of bonds regulated under Swedish/Norwegian law?
Andersson: In the Nordic bond market, restructurings are primarily governed by the terms and conditions of the bonds themselves rather than by a single, dedicated statute. The terms typically include provisions allowing amendments to be adopted through bondholder decisions, either at a bondholders’ meeting or through a written procedure. The framework and procedures are usually administered by the bond trustee, who acts on behalf of all bondholders and ensures that the process is conducted in accordance with the bond terms. Nordic bond terms also typically contain a so-called “no action” clause, preventing individual bondholders from taking direct action against the issuer and requiring that enforcement or other actions are taken by the bond trustee on behalf of the bondholders as a group.
BOND MAGAZINE: How does this differ from German law (SchVG)?
Andersson: We are not currently acting as trustee for German-law bonds and are therefore not fully familiar with the applicable legal framework in detail. But our understanding is that German bond restructurings are governed to a greater extent by statute, in particular the German Bond Act, which sets out the framework for bondholder resolutions as well as the appointment and role of a bondholders’ representative.
BOND MAGAZINE: What is your role as trustee?
Andersson: As bond trustee under the Nordic model, we represent the collective interests of the bondholders in accordance with the bond terms and conditions. In a restructuring situation, our role typically includes facilitating the decision-making process, organizing bondholders’ meetings or written procedures, coordinating external advisors, communicating relevant information to investors, and implementing resolutions that are validly adopted by the bondholders. It should be clarified that the bond trustee in the Nordics does not act as an advisor to the bondholders; where necessary, we engage external legal or financial advisors to support the process.
In addition, the bond trustee has a mandate, under certain circumstances, to take decisions independently without requiring formal approval from bondholders, where the action is considered to be in the best interests of the bondholders. This may include agreeing to minor adjustments to the bond terms or addressing operational matters while ensuring that the broader interests of the bondholders are protected. The bond trustee may also take more material actions where necessary to protect bondholders’ rights, such as enforcing security or taking other enforcement measures in accordance with the bond documentation
BOND MAGAZINE: What quorums exist, and what majority is required to amend bond terms?
Andersson: In the Nordic market, the first round of voting typically requires a quorum, usually meaning that at least 50% of the outstanding bonds must be represented in the vote. Amendments to key commercial terms generally require a qualified majority of the votes cast by participating bondholders, often two-thirds of the votes submitted. For other decisions, a simple majority (more than 50% of the votes cast) is typically sufficient. If the quorum is not met in the first round, a second round of voting may be held without a quorum requirement, allowing the process to continue and decisions to be adopted with the required majority of votes cast.
BOND MAGAZINE: This is a written procedure, not an in-person event, correct?
Andersson: Yes. In the Nordic bond market, decisions are typically made through a written procedure, allowing bondholders to submit their votes in writing within a specified voting period. This process is very efficient; we have handled more than 2,000 written procedures over the years. A physical bondholders’ meeting is also possible, but usually only if the issuer chooses to hold one or if the trustee considers it appropriate under the circumstances.
BOND MAGAZINE: Will investors have the opportunity to ask questions?
Andersson: Investors typically have the opportunity to ask questions to the issuer or the bond trustee during the process. But communication with bondholders usually takes place through formal notices and written correspondence to ensure that all investors receive the same information. This is important because most bonds in the Nordic market are publicly listed instruments, meaning that the issuer must comply with applicable securities market rules. As a result, information must generally be disseminated in a way that ensures equal access for all investors and avoids selective disclosure that could place certain investors at an informational advantage. If needed, the issuer and the bond trustee may also arrange an (electronic) information meeting prior to the voting process, where investors can receive further explanations of the proposal and ask questions.
BOND MAGAZINE: What advantages and disadvantages do you see in restructurings under German law versus Swedish/Norwegian law
Andersson: Given our primary focus on the Nordic bond market, we are not in a position to provide a detailed comparative assessment. But broadly speaking, the Nordic framework is flexible and largely documentation-based, allowing restructurings to be implemented efficiently through established trustee-led procedures. Being involved in the structure from issuance, with the bond trustee remaining in place throughout the life of the bonds, provides continuous oversight, early engagement with stakeholders, and the ability to act promptly if challenges arise. As the bond trustee in the Nordics do not have an advisory role, we always make sure to appoint the best suited external advisors for the situation.
By contrast, the German bond law is more prescriptive, specifying procedural steps, voting thresholds, and protections for minority bondholders. This provides legal certainty but may limit flexibility and can make the process slower compared with the Nordic approach, where the bond trustee can adapt procedures to the circumstances and respond quickly. In practice, the more rigid and detailed statutory framework may also, in some cases, lead to greater uncertainty around the outcome of restructuring processes, particularly where procedural requirements or voting dynamics make it less predictable whether proposed solutions will ultimately be approved or challenged.
Further, in Germany, the common representative of bondholders is often appointed only after a bondholder resolution, which may follow a default or an emerging restructuring situation. This later appointment can be challenging, as the representative enters the process once issues have already escalated, leaving less time to coordinate stakeholders, assess options, and implement solutions. As a result, opportunities for early intervention or preventative restructuring measures may be more limited, and the process can become more reactive rather than proactive.
The interview was conducted by Christian Schiffmacher, www.fixed-income.org
