The pre-launch stage also involves the preparation of various legal documents required for the bond issue. The key documents that are prepared for bond issue include prospectus, subscription agreement, trust deed and paying agency agreement. A prospectus is a disclosure document that provides investors with information of the issuer like issuer's business, financial statements, details about the key staffs and directors of the issuer, detailed information about the compensation, any litigation, list of material properties and any other material information. The subscription agreement is entered into between the issuer and the banks in the capacity of bondholder, wherein the issuer agrees to issue the bonds and the bank undertakes to accept and subscribe for the bonds on a determined issue date and at a specified issue price among other agreed terms and conditions. The trust deed and the paying agency agreement are entered into between the issuer and the trustee and paying agent.

The typical contractual structure of a bond issue involving the key stakeholders is shown below:

A due diligence exercise is carried out before launching the bond issue. The due diligence exercise is carried out by both the issuer's lawyer and the lead manager's lawyer. The issuer's lawyers carry out due diligence exercise to give an opinion on the capacity of the issuer to issue the bonds. The lead manager also needs to know whether the issuer is creditworthy and any other risks associated with the issuer.