High Yield / Debt Offering Process
I'm trying to figure out the process for a how a company can issue a High Yield/Sub Notes (similar to IPO for equity offering). There are many sites that describe in detail of how an IPO is conducted but I can't find anything for debt offering. Does a company have to issue a prospectus with highlights of offering, business overview, products, customers, key risks facing the company etc for every single offering?
Additionally, is there a roadshow to guage investor appetite to come up witn an offering price?
Any sites or comments that address this topic is greatly appreciated. Thanks.
yes, a HY offering process is similar to an equity offering. In addition, the company would also prepare presentations for credit rating agencies, which would affect the pricing of the credit being offered. A roadshow or a 1-day of one-on-one meetings is not out of the ordinary. Banks would then syndicate/sell the credit through its HY sales force rather than the equity arm. Generally for acquisition debt, a bank book and a lenders presentation would be prepared.
Private debt offerings are usually more complicated and usually look more like sell mandates but still follow the same principals: 1) Bank sends teaser / contacts debt funds 2) NDA / CA executed 3) CIM circulated 4) lenders submit prelim term sheets or marked-up bank drafts (here or can be later) 5) lenders meet management and gets inital q&a's out of the way 6) lenders gain access to data room for diligence 7) lenders submit termsheet (or at this point, depends on the process) 8) can meet management again or have a call 9) terms finalized 10) legal docs executed 11) deal closes
Mezzket These steps are for 144a offering?
different between 144a vs reg-S offerings are just extra legal steps - the general concept behind each are teh same
all 144a has is an extra registration step that allows institutions to trade it among themselves without onerous legal docs... my steps are general private debt offering (transfers more complicated and subject to transfer agreements etc.)..
the private side issuance process is more time consuming as lenders have full access to full private / financial /projection information and need to digest it... in a hy sale, the cim and a few other steps get replaced by use of a prospectus vs cim, roadshow vs. mgmt pres and the pricing isnt set by the purchaser instead the mkt is tested for pricing appetite...
Thanks guys.
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