Offering Memorandum for Global Notes

Offering Memorandum for Global Notes

Private and Public Offering Memorandum Writing Services for Debt

If your company is seeking issue global notes and sell them for capital a well written Offering Memorandum is mandatory. The Offering Memorandum will outline the terms of your offer and give investors key insights into your business to make an educated decision about investing in your company. One of the most common forms of securities sold are global notes. Global notes normally grant one an interest payment that is either fixed a monthly, bi-annual, yearly or at maturity payments). Global notes often clear and settle with Euroclear or Clearstream in Europe.

An Offering Memorandum is a formal legal document that is required by and filed with the relevant government financial securities regulator and relevant state securities regulator, and provides details about an investment offering for sale to qualified institutional investors or to the public at large, known as retail investors. There are typically two types of Offering Memorandum; (i) the preliminary Offering Memorandum, often referred to as “red herring”, “draft red herring” or “draft red herring Offering Memorandum” (DRHP) and (ii) the Final Offering Memorandum, also referred to as Statutory Offering Memorandum aka Offering Circular. Any one of these documents is needed to give investors in order to sell global notes.

What Can Do for Companies Pursuing a Private or Public Offering to Raise Capital for Global notes

Our team of securities industry consultants, investment banking veterans and attorneys can assist with the writing and drafting of your company’s global note Offering Memorandum necessary for your capital formation process. Whether you are conducting a private or public offering for equity issuance, our expert team can ensure that your Offering Memorandum is structured to maximize success as you seek to raise capital from qualified investors when selling global notes. Here are the basic (7) steps regarding our process:

  1. Our staff 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 preliminary and/or final Offering Memorandum, or any other required documents, such as the private placement memorandum, or legal agreements and/or opinion letters 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.

Public vs. Private Offering Memorandum

Some of the most common interchangeable terms in the offering document space is the usage of the word “Offering Memorandum” for both private and public offerings. Which is correct? Traditionally speaking, the term Offering Memorandum is most often associated with a public offering or listing on a global note exchange. A company going through the stages of an initial public offering must create a Offering Memorandum. However, in the private placement world, it has also become common to use the term Offering Memorandum, even though the most appropriate term would be “private placement memorandum”, “PPM”, or even “offering memorandum”. Even within this narrow field, the offering memorandum or private placement memorandum (PPM) can be associated with a hedge fund or mutual fund, or a basic company raising capital. Many refer to the private placement document process by simply calling it Offering Memorandum, as worldwide this is the most common term designated for raising capital. Our team assists with public Offering Memorandum writing and offering circular documents worldwide.

Offering Memorandum Writing for Offering of Global note

There are two type of debt offerings that are most common, private and public. Debt offerings are a popular way to raise capital and many companies issue debt securities both publicly and privately to raise capital.  We can assist with any private debt or public offering document or Offering Memorandum globally.

What Does a Preliminary Offering Memorandum Include?

A preliminary Offering Memorandum includes the name of the company issuing the global notes (“Issuer”) or the mutual fund manager that is issuing global notes, the amount and type of securities being sold and, for global notes or equity offerings, the number of available global notes. The Offering Memorandum also details whether an offering is public or private, the fees charged by the underwriters for floating global notes to the investors and names of the Issuing company’s principals. A brief summary of the company’s financial information, whether the local securities regulator has approved the Offering Memorandum and other pertinent information is also included.

Fees in a Offering Memorandum

Because the fees that most mutual funds charge is withheld from investors’ profits, the fees are listed in a table near the beginning of the Offering Memorandum. Fees for purchases, sales and transferring assets among funds are included. This simplifies comparing the costs of various mutual funds. High-cost funds have fees exceeding 1.5%, whereas low-cost funds have expenses below 1%.

Risks in a Offering Memorandum

A Offering Memorandum is issued as a way of informing investors about the risks involved with investing in a global note or mutual fund. The information also protects the issuing company (Issuer) against potential legal claims brought by investors or other parties that claim pertinent information was not fully detailed before the investor put money into a security.

Risks are typically disclosed early in the Offering Memorandum and described in more detail later. The age of the company, amount of management experience and their specific roles or involvement in the business, and capitalization of the global note issuer are described. A table detailing which people own global notes is included and is an important clue to help prospective investors determine whether the principals are holding onto their global notes. If global notes are being sold or liquidated by management (also known as “insiders”), there may be a financial issue with the business.

Final Offering Memorandum aka Statutory Offering Memorandum aka Offering Circular

  1. The final version of a prospectus for a public offering of securities. This document is complete in all details concerning the offering and is referred to as a “statutory Offering Memorandum” or “offering circular.”
  2. Because open-end mutual funds are continuously offering global notes to the public, a fund Offering Memorandum is usually updated annually and made available to the public. Mutual fund Offering Memorandums are all of the “final” variety.

BREAKING DOWN ‘Final Offering Memorandum’

The most important difference between a final Offering Memorandum and a preliminary Offering Memorandum is that a preliminary Offering Memorandum is NOT an official offering to sell securities and the final Offering Memorandum is the official offering document and contains the price of the securities being sold.

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