Rule 144A

Rule 144A

What Prospectus Can Do for Issuers advancing a capital raise via SEC Rule 144a

Prospectus’s team specializes in 144A offerings.  SEC Rule 144A is one of the most utilized rules in the debt securities markets when it comes to raising capital, and indeed it is a nearly trillion-dollar yearly market for capital raising.

What is Rule 144A

This SEC rule provides a safe harbor from registration and the requirements of such registration under the Securities Act of 1933.  Adopted pursuant to the U.S. Securities Act of 1933, Rule 144A can only be implemented if the sale or resale of securities is to Qualified Intuitional Buyers (“QIBs”).  These QIBs are normally institutional investors with a net worth of $100 million investable assets. 144A securities can only be sold to U.S. citizens.

When underwriters or investment banks begin to sell securities under Rule 144A, it is mandatory that they approach and only complete a transaction with a QIB.  The main mechanisms used to raise 144A capital are the prospectus, the offering memorandum or private placement memorandum.  These documents are used worldwide to sell 144A securities, and must be submitted to depositories such as Euroclear and Clearstream, or the Depository Trust Corporation (DTC) for clearing and settlement purposes, particularly for debt issuance.

What We Do

Our team of Rule 144A consultants – both for debt and for equity – assists U.S. or foreign company’s Rule 144A offering guidance, including:

  1. The Prospectus.com team undertakes the initial analysis to check your company’s business model and/or the securities to be issued to ensure that Rule 144A can be complied with; and that the securities qualify for a Rule 144A Offering.  Ahead of the issuance of the 144A securities, an issuer must know whether the securities will qualify.  Our team will do an analysis on the issuer’s qualifications and provide a reliable assessment regarding Rule 144A.  This free consultation saves time and capital during the 144A process.
  2. To assist in the successful offering of our clients, Prospectus.com’s team conducts all necessary effort in order to achieve Rule 144A status and allow for a 144A offering to transpire. This includes the writing of the 144A offering memorandum or 144A prospectus, as well as supporting documentation such as the subscription agreements or trust indenture, obtaining the securities identification number, such as the international securities identification code or a SEDOL code from the United Kingdom (like the CUSIP number from the U.S.) and more.

144A Bond Offerings

Prospectus.com helps companies with 144A bond offerings.  144A bonds or 144A notes consist of many aspects, but the single most important document is the prospectus or the offering memorandum.  The prospectus will outline the terms of what the issuer is offering, including the dollar or other currency denominations, the interest rate, maturity date, payment dates, legal and financial information, risk factors, subscription agreement and much more.  144A bond offerings are often conducted with the Regulation S rules in place, which allows for the sale of securities to non-U.S. investors, unlike Rule 144A which allows for the sale and resale of 144A securities to U.S. persons only.   The 144A bond market consists of nearly 99% of all 144A transactions, the remainder being equity offerings.  The 144A market is nearly a trillion-dollar market.  Often times, the issue will create an offering memorandum and offer the bonds, via private offering, through the prospectus, as opposed to a public bond offering.  Prospectus.com can assist in all of your 144A bond requirements.

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Rule 144A

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Rule 144A