All of French Company Law: ordinary law of companies and specific regime for different types of companies

Company Law (en cours)

Since they are creditors of the issuing company, bondholders are entitled to interest and the repayment of their bonds.

1) Right to interest

The issuance contract must specify the interest rate, fixed or variable, that will be paid to the bondholders. During the term of the loan, the general meeting of bondholders may deliberate on any proposal relating to the total or partial waiver of the guar …

Right to interest and repayment of bonds

Since they are creditors of the issuing company, bondholders are entitled to interest and the repayment of their bonds.

The issuance contract must specify the interest rate, fixed or variable, that will be paid to the bondholders. During the term of the loan, the general meeting of bondholders may deliberate on any proposal relating to the total or partial waiver of the guarantees granted to the bondholders, the postponement of the interest payment due date, and the modification of the terms of repayment or the interest rate .

Bondholders are entitled to the repayment of the nominal amount  of their bonds. The terms of this repayment are determined by the issuance contract. The latter may set a maturity date or provide for early repayment. In the absence of special provisions in the issuance contract, the company cannot impose early repayment of the bonds  on the bondholders.

Finally, under Article 1343-3 of the Civil Code, the payment in France of a monetary obligation is made in euro. It may take place in another currency if the obligation thus expressed arises from an international transaction or a foreign judgment. The parties may agree that the payment will be made in a foreign currency if it occurs between professionals, when the use of a foreign currency is commonly accepted for the transaction concerned.

Civil Code, Art. 1343-3; CA Grenoble, 21 June 2022, LawLex202300005297JBJ, holding that Euro Medium Term Notes (EMTN), complex debt securities, can be assimilated to bonds, as long as they confer a general claim right against the issuer and are negotiable on the Luxembourg stock exchange; Cass. 2e civ., 23 November 2017, LawLex202200009163JBJ, considering that the classification of a bond is not contingent upon the guarantee of repayment of the nominal value of the security; Cass. com., 21 February 2012, LawLex202200011345JBJ, specifying that the claim for repayment of the nominal value of super-subordinated securities arises on the date of the issuance contract and not on its due date; and like all other bond creditors, holders of super-subordinated securities may be subjected to a partial or total waiver of their claims and a conversion of their claims into securities granting or potentially granting access to capital in the event of a safeguard procedure opened against the issuing company; Cass. com., 2 June 2004, LawLex202100002926JBJ, affirming that claims filed by bondholders individually cannot be rejected solely because a common declaration was not made by the bondholders' representative, provided that one had not been designated beforehand.

Company Law (en cours)

108. Right to interest and repayment of bonds

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Les notions juridiques connexes

108. Right to interest and repayment of bonds

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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