Here are a couple of questions to worry your lawyers with, next time you are arranging a Euronote facility. For a US issuer, ask the American attorney what form his opinion will take when he confirms that the issue does not have to be registered with the Securities and Exchange Commission (SEC) under the 1933 Securities Act. For a UK issuer, ask the English solicitor whether the issue-- assuming the borrower is a UK entity-- should be done through a public limited company or through an offshore vehicle. Ask him in particular about the prospectus requirements.
On each of these questions legal opinion has been divided in recent months. The US problem has arisen out of a letter sent by Los Angeles law firm O'Melveny and Myers to the SEC, and the SEC's reply early last year. Some US lawyers are happy to issue opinions on the back of the SEC's reply--called a no-action letter, because the SEC confirms it will take no action for non-registration under the 1933 Act. Others say that the letter is of limited application and by its own admission does not affect the legal liability that an issuer and its advisers could incur for non-registration if a disgruntled noteholder sued.