What is a 144A bond offering?
What is a 144A bond offering?
A 144A bond offering is a private placement offered in the United States for U.S. investors and clears through DTCC, usually (but not always). Additionally, 144A offerings and its Reg S component clear and settle via Euroclear or Clearstream in Europe. A 144A is, in the vast majority of cases, a debt issuance.
What are the terms of financing?
Financing terms can also relate to the specifics of a particular loan, mortgage, or credit facility. They would spell out the interest rate, due dates of payments, and number of payments anticipated.
What does nc1 101 mean?
A form of soft call protection for lenders/investors in securities, designed to mitigate the adverse effects of call risk for investors. 101 soft call protection requires the payment of a 1% premium to the investor, on any early redemption of a callable bond by the borrower/issuer.
What is a SAS 72 comfort letter?
A standard form SAS 72 (or auditor representation) letter delivered to the issuer’s auditors in an unregistered securities offering to allow the auditors to prepare and deliver a comfort letter.
Are 144A bonds publicly traded?
Many 144As are issued by public companies and Securities and Exchange Commission filers, sometimes with other registered bonds and exchange-traded common stock. One top-ten issuer, Bausch Health, has only 144A bonds. On the other hand, all but one of the top-ten high-yield issuers have publicly traded stocks.
What is a Softcall?
A soft call provision increases a callable bond’s attractiveness, which acts as an added restriction for issuers should they decide to redeem the issue early. A soft call provision requires that the issuer pays the bondholders a premium to par should the bond be called earlier.
What does nc3 mean in bonds?
A typical example of a bond with call protection would be 2 or 3 years of call protection (noted as NC-2 or NC-3), where the borrower is not allowed to prepay. After the end of the call protection period, the bonds do become callable, but the borrower would have to pay a call premium, usually as a % of par value.
What is sas72?
72 (“SAS 72”) provides guidance to accountants in the preparation of comfort letters, including their scope and form. (SAS 72 is also referred to as “AU Section 634,” where it was subsequently codified.) SAS 72 sets forth the contents of sample letters, which have become the basic industry text for these letters.
