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Italian rules on Debt for Italian Non-Listed Companies—Italy has passed clean-up rules concerning the issuance of corporate bonds and commercial paper

December 2012
Michael S. Immordino, Ferigo Foscari, Iacopo Canino, Nicholas Lasagna, Rob Mathews, Stuart Matty, Colin Chang, David Becker

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The Italian Government has approved new rules concerning the issuance of corporate bonds and commercial paper through Law Decree no. 179 of October 18, 2012 on "Further Urgent Measures for Growth of the Country", which was converted into law (with amendments) by Law no. 221 of December 17, 2012, published in the Italian Official Gazette on December 18, 2012 ("Decree 179").

Article 36 of Decree 179 resolves most of the issues that were left open by Law Decree no. 83 of June 22, 2012 ("Decree 83"), which was converted into law (with amendments) by Law no. 134 of August 7, 2012 and published in the Italian Official Gazette on August 11, 2012.

Decree 179 introduces amendments to both the regime for corporate bonds and commercial paper, in particular concerning:

  • the deductibility of interest paid on corporate bonds;
  • the definition of "Qualified Investors";
  • subordinated bonds and/or bonds with profit participation; and
  • the exemption from withholding tax on interest for commercial paper.
        

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