PIPEs and RDs
Quick and discreet financing options
Over the past decade the PIPEs and RDs market has become a leading source for companies to raise equity and equity-linked capital. Historically used primarily by small and mid-cap companies, PIPEs and RDs have evolved to provide a valuable financing alternative to the traditional follow-on market for a wide range of companies across multiple industries seeking to raise capital quickly, discreetly and in any type of market environment. In 2008, nearly 800 companies raised $32 billion in the PIPE and RD market.
Private Investment in Public Equity (PIPEs) are a privately negotiated placement of a public company's unregistered equity or equity-linked securities to a group of institutional investors where such sale is conditioned upon a registration statement being filed with and declared effective by the SEC post sale of such securities.
Registered Directs (RDs) are a privately negotiated placement or underwriting of a public company's registered equity or equity-linked securities off an effective shelf registration statement to a group of institutional investors.
PIPEs and RDs are typically utilized by companies seeking benefits relative to a traditional equity offering including:
- Fast execution
- Efficient pricing
- Significant flexibility with regard to offering size and structure
- Preserves confidentiality, thus mitigating potential share price impact during marketing
- Abbreviated roadshow, allowing management to remain focused on leading the business
Source: www.placementtracker.com
