Parties involved in a Rule 144A/Regulation S debt offering
Produced in partnership with Lloyd Harmetz of Morrison & Foerster LLP

The following Banking & Finance practice note produced in partnership with Lloyd Harmetz of Morrison & Foerster LLP provides comprehensive and up to date legal information covering:

  • Parties involved in a Rule 144A/Regulation S debt offering
  • Role of investment banks in pricing and marketing securities
  • Role of the issuer’s independent auditors
  • Role of the trustee/paying agent
  • Role of issuer’s counsel
  • Role of initial purchasers’ counsel
  • Role of DTC

Parties involved in a Rule 144A/Regulation S debt offering

This Practice Note discusses the parties in a Rule 144A (17 CFR 230.144A)/Regulation S debt offering. These offerings involve a team of representatives of the issuer, together with external advisors. External advisors for a securities offering will typically include one or more investment banks to serve as the initial purchasers/underwriters of the securities, an independent auditing firm, outside legal counsel for the issuer and a trustee/paying agent. The investment banks will also have their own outside counsel. Another important party in a Rule 144A/Regulation S offering is The Depository Trust Company (DTC), which keeps securities ownership records and settles trades.

Role of investment banks in pricing and marketing securities

The investment bankers play a leading role throughout the offering process. They market the securities, set the price at which the securities will be offered to the public (together with other relevant economic terms, such as the interest rate on the debt securities), and purchase the securities from the company and re-sell them to investors. The investment banks are often permitted to trade in the securities to ensure an orderly market for the securities. The investment banks have two main, and potentially conflicting, responsibilities—to sell the securities on behalf of the company and to recommend the securities to investors as a good investment. The banks’ reputation depends on pleasing

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