Private Entity Access To Capital Markets - Through Rule 144A For Life Offerings

more+
less-

Many privately or family owned entities may believe access to U.S. capital markets is foreclosed due to burdensome and cost prohibitive regulatory requirements. With interest rates at historical lows and a robust supply of dollars available to borrow, many privately owned entities are selling so called high yield notes in Rule 144A for life offerings. These notes are sold in underwritten private offerings only to qualified institutional buyers (“QIBs”) with no covenant made by the issuer to exchange them in a future exchange offer for notes registered under the Securities Act of 1933, as amended (the “1933 Act”). Rule 144A for life offerings allow private entities to enjoy many of the benefits that accrue to publicly listed entities by borrowing funds through U.S. capital market offerings without subjecting the private entity to making periodic filings with the U.S. Securities and Exchange Commission (“SEC”) or having its top executive officers attest quarterly to the adequacy of disclosure controls or financial statement internal controls.

The table below sets forth a summary of the substantive differences between indebtedness incurred in a Rule 144A for life offering and in a traditional bank term loan.

Originally Published in Law360 on April 4, 2013.

Please see full publication below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Published In: Business Organization Updates, General Business Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jackson Walker | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »