What is a 144A debt offering?

A 144A bond is when a company issues debt, i.e. a promise to return one’s capital at a fixed time, to QIBs, or qualified institutional buyers who meet a net worth threshold.

Where do Rule 144A issues trade?

Rule 144A allows qualified institutional buyers (“QIBs”) to buy and trade between themselves large blocks of privately placed issues. Thus, issuers can sell private placements to these QIBs, who can then trade the private placement issues among themselves. This market is not available to individuals.

Can a non US investor buy 144A?

The Rule 144A securities can be re-sold to non-U.S. persons if the buyer certifies that it is not a U.S. person, and the sale otherwise complies with Regulation S.

Can a US investor buy Reg S securities?

Regardless of the foreign issuer’s compliance with the Regulation S requirements, purchasers cannot purchase securities and resell them into the United States under circumstances in which they would be deemed statutory underwriters unless they register those resales.

What is a 144 filing?

Form 144, required under Rule 144, is filed by a person who intends to sell either restricted securities or control securities (i.e., securities held by affiliates. Form 144 is notification to the SEC of this intention to sell and must take place at the time the sell order is placed with the broker-dealer.

What is the purpose of the SEC Rule 144A?

Rule 144A is a Securities and Exchange Commission (SEC) rule modifying a two-year holding period requirement on privately placed securities to permit qualified institutional buyers to trade these positions among themselves.

Who are qualified institutional buyers under Rule 144A?

• Rule 144A provides an exemption for sales that arelimited to “qualified institutional buyers” (“ QIBs”), which are large institutional investors in the United States as part of a resale of eligible securities, or purchasers that the seller and any person acting on behalf of the seller reasonably believe to be QIBs.

How many years of financial statements are required under Rule 144A?

Annual Financial Statements. In a Rule 144A context, it is typical to include three full years of annual financial statements. The annual financial statements will need to be audited but, as noted above, need not be prepared in accordance with or reconciled to US GAAP.

When did FINRA begin to report Rule 144A trades?

The Financial Industry Regulatory Authority (FINRA) began to report Rule 144A trades in the corporate debt market in 2014 in order to bring more transparency to the market and to allow the reporting of valuation “for mark-to-market (MTM) purposes.” 9