144A Bond Offering Memorandum

144A Bond Offering Memorandum

Prospectus.com team has written, edited or assisted with hundreds of private placement Offering Memorandums for 144A (144A) bond offerings. 144A is a popular method to raise either debt capital or equity capital, while the majority of 144A private placement offerings do fall into the debt sphere, i.e. 144A bonds. A Private Placement Offering that falls under Rule 144A implies that US based investors will be solicited for money. A 144A securities offering is also called an onshore offering as this implies the offering is available to American investors. This is in contradistinction to Rule Regulation S where only non-US investors may be asked for capital. For many issuers, the ability to raise from both US and non-US investors is an important strategy, as this opens up the pool of investors. Thus, many issuers conduct a 144A and Reg S (144A/Reg S) offering under both Rules simultaneously. Reg S allows for the exemption of securities if the securities were sold outside of one’s country while 144A allows the selling to US investors.

Rule 144A is the safe harbor exemption from the registration requirements of Section 5 of the Securities Act for specifc offers and sales of qualifying securities by specific persons other than the issuer of the securities. This exemption applies to resales of securities to qualified institutional buyers, also known as “QIBs.” To be considered a QIB, you must be a corporate entity with minimum $100mil of securities held for discretionary investment purposes.

Securities eligible for resale under Rule 144A are those issued by either U.S. or non-US (foreign issuers) that are not listed on a U.S. securities exchange or quoted on any automated IDB (inter-dealer-broker) platform.

Typical transactions conducted under Rule 144A include:

  • Offerings of debt or preferred securities by public companies
  • Offerings by foreign issuers that do not want to become subject to U.S. reporting requirements; and
  • Offerings of common securities by non-reporting issuers

The Offering Memorandums will outline the terms of the 144A securities offering. For example, if the company is selling notes or bonds, the Offering Memorandums will detail the terms of the offering such as the interest rate and maturity date, payment and coupon dates, convertible bond or convertible note dates and terms, and many other factors. Thus, the writing of a Offering Memorandums under 144A can assist in expediting the capital raising process.

144A Bond Offering Memorandum Writing Assistance

For the securities to be exempted from registration in a 144A offering the Offering Memorandums must detail many features. Here are a few:

  • The Offering Memorandums must give details of the securities being offered for sale to investors;
  • Like in any well prepared and written Offering Memorandums the management team of the company must be detailed;
  • Additional material regarding the 144A securities being offered must be shown as well (if other than common stock); and
  • Finally, financial projections or financial statements must be included in the Offering Memorandums. In most cases, they will need to be certified by an independent accountant.

Private Placement of 144A Bonds

144A bond offerings is often used in the private placement market to raise capital. The most common form of any document used to raise capital under 144A is the bond Offering Memorandums, which will detail the private placement terms. Private placements of 144A are both conducted for equity and debt offerings.

Public Placement of 144A

Often companies that are listed publicly may initiate a private offering under rule 144A to raise capital debt capital by selling securities such as bonds.

Prospectus for Issuers of 144A Bonds

For issuers considering selling 144A bonds, to investors a well-tailored and written Offering Memorandums is mandatory, particularly for those seeking US investors. A Offering Memorandums offering document can add value to your offering by showing investors you are serious about raising money. In addition, it is essentially a requirement for any issuer that wants to raise debt or equity capital under 144A to hand investors a Offering Memorandums. The Offering Memorandums will educate the investors and allow them to decide if the offer merits deeper thought or an investment. The document itself should tell the company story, both the product offerings and the securities being offered in detail, including the team behind the company, the terms of the securities, rules such as 144A and more. Attached to any Offering Memorandums is the subscription agreement, which is the “contract” between the issuer and the investor. Once signed the investor would then send in his/her money for the securities.

The Offering Memorandums should be viewed by the issuer as an opportunity not to be wasted. In other words, the Offering Memorandums is the story of the company and will be the single most important document used to raise capital from investors. Without such a formal document, it is unlikely a company will raise capital, let alone be taken seriously by those that invest in 144A securities.

What Prospectus.com Can Do

For startups or established companies or funds seeking to raise capital via a formal 144A offering, securities regulators worldwide, as well as investors in a private offering require the Issuer to submit a professional preliminary red herring Offering Memorandums offering document. The Prospectus.com team of consultants and attorneys can assist with the writing and drafting of your Offering Memorandums for financing and other securities offering documents. Whether you are conducting a private or public offering for debt or equity issuance, our team can ensure that your Offering Memorandums is structured to conform with both local regulatory and global standards to maximize success during your capital formation needs. The Prospectus.com team of consultants and attorneys can assist with the writing and drafting of your company’s red herring preliminary Offering Memorandums or other offering documents. Whether you are conducting a private or public offering for debt or equity issuance, our team can ensure that your Offering Memorandums is structured to maximize success.

Here are the (7) basic steps regarding our process:

  1. Prospectus.com team conducts the initial analysis of your company.
  2. We will recommend the best course of action, taking into consideration time frame, budgets and overall needs.
  3. We undertake all work and begin the process. This would include the drafting of the Offering Memorandums or any other document such as the offering memorandum, or legal agreements from our attorneys.
  4. We send the documents to you for review.
  5. Once approved, and if you need, an attorney opinion letter can be included in the paperwork.
  6. If you require filing or registration with various agencies we will undertake as well.
  7. We are a start-to-finish firm and our number one goal is the successful growth of our clients.

Prospectus.com can assist with your 144A campaign as well as with your debt financing private placement needs. We are the world leading firm that specializes in public and private Offering Memorandums writing and general business and legal document writing services.

Our team at Prospectus.com has years of experience writing Offering Memorandums for hundreds of varying industries and businesses under 144A for bonds. We work one on one with our clients during the Offering Memorandums drafting process and take it upon ourselves – in almost obligatory fashion –  to assist our clients with their quest for growth once our services our complete.

If you are considering raising capital and the offering memorandum Offering Memorandums written feel free to reach out to us.

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