Note and Warrant Financing Term Sheet
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The Information Content of Put Warrant Issues
The Information Content of Put Warrant Issues Scott Gibson a Paul Povel b Rajdeep Singh b February 2006 a Department of Economics and Finance, School of Business, College of William and Mary, Williamsburg, VA 23187. b Department of Finance, Carlson School of Management, University of Minnesota, 321 19th Avenue South, Minneapolis, MN 55455. Email: [email protected] (Gibson), [email protected] (Povel) and [email protected] (Singh). We are grateful to Sugato Bhattacharyya, Francesca Cornelli, Gustavo Grullon, Dirk Jenter, Jack Kareken, Ross Levine, Bob McDonald, Roni Michaely, Sheridan Titman, Andrew Winton, and seminar participants at the 11th annual Financial Economics and Accounting conference at Ann Arbor, MI, and at University of Minnesota and Cornell University for their helpful comments. The Information Content of Put Warrant Issues Abstract We analyze why ¯rms may want to issue put warrants, i.e., promises to repurchase their own shares at a given price in the future. We describe four alternative explanations, one of which is novel: that put warrants are issued by ¯rms that wish to signal their good future prospects to their investors (who undervalue the ¯rms in the eyes of their managers). We test the validity of the four alternative explanations, using a new, hand-collected data set on put warrant issues in the U.S. between 1993 and 1999. We ¯nd evidence that is inconsistent with three of the four explanations. Only the signaling explanation is consistent with the empirical evidence. Put warrant issuers strongly outperform their peers in the years after the put warrant issues; they enjoy valuable and improving investment opportunities, and they invest heavily. -
Initial Public Offerings
November 2017 Initial Public Offerings An Issuer’s Guide (US Edition) Contents INTRODUCTION 1 What Are the Potential Benefits of Conducting an IPO? 1 What Are the Potential Costs and Other Potential Downsides of Conducting an IPO? 1 Is Your Company Ready for an IPO? 2 GETTING READY 3 Are Changes Needed in the Company’s Capital Structure or Relationships with Its Key Stockholders or Other Related Parties? 3 What Is the Right Corporate Governance Structure for the Company Post-IPO? 5 Are the Company’s Existing Financial Statements Suitable? 6 Are the Company’s Pre-IPO Equity Awards Problematic? 6 How Should Investor Relations Be Handled? 7 Which Securities Exchange to List On? 8 OFFER STRUCTURE 9 Offer Size 9 Primary vs. Secondary Shares 9 Allocation—Institutional vs. Retail 9 KEY DOCUMENTS 11 Registration Statement 11 Form 8-A – Exchange Act Registration Statement 19 Underwriting Agreement 20 Lock-Up Agreements 21 Legal Opinions and Negative Assurance Letters 22 Comfort Letters 22 Engagement Letter with the Underwriters 23 KEY PARTIES 24 Issuer 24 Selling Stockholders 24 Management of the Issuer 24 Auditors 24 Underwriters 24 Legal Advisers 25 Other Parties 25 i Initial Public Offerings THE IPO PROCESS 26 Organizational or “Kick-Off” Meeting 26 The Due Diligence Review 26 Drafting Responsibility and Drafting Sessions 27 Filing with the SEC, FINRA, a Securities Exchange and the State Securities Commissions 27 SEC Review 29 Book-Building and Roadshow 30 Price Determination 30 Allocation and Settlement or Closing 31 Publicity Considerations -
Preparing a Venture Capital Term Sheet
Preparing a Venture Capital Term Sheet Prepared By: DB1/ 78451891.1 © Morgan, Lewis & Bockius LLP TABLE OF CONTENTS Page I. Purpose of the Term Sheet................................................................................................. 3 II. Ensuring that the Term Sheet is Non-Binding................................................................... 3 III. Terms that Impact Economics ........................................................................................... 4 A. Type of Securities .................................................................................................. 4 B. Warrants................................................................................................................. 5 C. Amount of Investment and Capitalization ............................................................. 5 D. Price Per Share....................................................................................................... 5 E. Dividends ............................................................................................................... 6 F. Rights Upon Liquidation........................................................................................ 7 G. Redemption or Repurchase Rights......................................................................... 8 H. Reimbursement of Investor Expenses.................................................................... 8 I. Vesting of Founder Shares..................................................................................... 8 J. Employee -
Data Observations of Employee Ownership & Impact Investment
Georgia State University College of Law Reading Room Faculty Publications By Year Faculty Publications Winter 2017 In Pursuit of Good & Gold: Data Observations of Employee Ownership & Impact Investment Christopher Geczy University of Pennsylvania Wharton School, [email protected] Jessica S. Jeffers University of Pennsylvania Wharton School, [email protected] David K. Musto University of Pennsylvania Wharton School, [email protected] Anne M. Tucker Georgia State University College of Law, [email protected] Follow this and additional works at: https://readingroom.law.gsu.edu/faculty_pub Part of the Business Law, Public Responsibility, and Ethics Commons, Business Organizations Law Commons, Contracts Commons, and the Corporate Finance Commons Recommended Citation Christopher Geczy, Jessica S. Jeffers, David K, Musto, & Anne M. Tucker, In Pursuit of Good & Gold: Data Observations of Employee Ownership & Impact Investment, 40 Seattle U. L. Rev. 555 (2017). This Article is brought to you for free and open access by the Faculty Publications at Reading Room. It has been accepted for inclusion in Faculty Publications By Year by an authorized administrator of Reading Room. For more information, please contact [email protected]. In Pursuit of Good & Gold: Data Observations of Employee Ownership & Impact Investment Christopher Geczy, Jessica S. Jeffers, David K. Musto & Anne M. Tucker* ABSTRACT A startup’s path to self-sustaining profitability is risky and hard, and most do not make it. Venture capital (VC) investors try to improve these odds with contractual terms that focus and sharpen employees’ incentives to pursue gold. If the employees and investors expect the startup to balance the goal of profitability with another goal—the goal of good—the risks are likely to both grow and multiply. -
Illustrative IFRS Financial Statements 2019 – Investment Funds
Illustrative IFRS financial statements 2019 Investment funds Stay informed. Visit inform.pw c.com Illustrative IFRS financial statements 2019 – Investment funds Illustrative IFRS financial statements 2019 – Investment funds This publication provides an illustrative set of financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), for a fictional open-ended investment fund (‘ABC Fund’ or the ‘Fund’). ABC Fund is an existing preparer of IFRS financial statements; IFRS 1, ‘First-time adoption of IFRS’, is not applicable. It does not have any subsidiaries, associates or joint ventures. The Fund’s shares are not traded in a public market. Guidance on financial statements for first-time adopters of IFRS is available at www.pwc.com/ifrs. This publication is based on the requirements of IFRS standards and interpretations for the financial year beginning on 1 January 2019. There are no standards effective for the first time in 2019 that required changes to the disclosures or accounting policies in this publication. However, readers should consider whether any of the standards that are mandatory for the first time for financial years beginning 1 January 2019 could affect their own accounting policies. Appendix XII contains a full list of these standards (including those that have only a disclosure impact) as well as a summary of their key requirements. In compiling the illustrative disclosures, we have updated the guidance included in Appendix VIII to address IFRIC 23 ‘Uncertainty over income tax treatments’ which is applicable for financial years beginning on or after 1 January 2019. Commentary boxes are included throughout the publication to provide additional information where necessary. -
Seed Financing Overview
Seed Financing Overview This set of documents will provide you the knowledge and tools you need to successfully attract, negotiate, and secure seed level financing. This guide is designed for an arms-length transaction between third-party investors and an early-stage company, rather than for friends and family deals. Capital raised by seed financing may be used to help you prove your concept in the marketplace and, hopefully, achieve growth and profitability. You will then be better positioned to attract larger amounts of capital and grow beyond a startup. For more information on whether or not your company is ready for seed financing, please see our Financing Alternatives Primer. There are three parts to this document: 1 This overview with a pre-financing checklist; 2 A sample term sheet; and 3 A guide for the term sheet. This overview provides an introduction to seed financing and a checklist of steps to take and documents to draft before approaching investors. The second document, the term sheet, is a barebones template of the most important terms, drafted with your best interest in mind. It is a negotiation tool, not a finished or executable document. The last document, the guide, explains terms contained in the term sheet and covers some additional terms you may consider adding or are likely to see in investors’ drafts of such a term sheet. Always keep your personal and business objectives in mind as you use these documents to guide you through seed financing. Before Seeking Seed Financing, You Should: Create a Business Plan. It is important to have a polished business plan to present to investors to demonstrate your thoughtfulness and professionalism. -
Asset Swaps and Credit Derivatives
PRODUCT SUMMARY A SSET S WAPS Creating Synthetic Instruments Prepared by The Financial Markets Unit Supervision and Regulation PRODUCT SUMMARY A SSET S WAPS Creating Synthetic Instruments Joseph Cilia Financial Markets Unit August 1996 PRODUCT SUMMARIES Product summaries are produced by the Financial Markets Unit of the Supervision and Regulation Department of the Federal Reserve Bank of Chicago. Product summaries are pub- lished periodically as events warrant and are intended to further examiner understanding of the functions and risks of various financial markets products relevant to the banking industry. While not fully exhaustive of all the issues involved, the summaries provide examiners background infor- mation in a readily accessible form and serve as a foundation for any further research into a par- ticular product or issue. Any opinions expressed are the authors’ alone and do not necessarily reflect the views of the Federal Reserve Bank of Chicago or the Federal Reserve System. Should the reader have any questions, comments, criticisms, or suggestions for future Product Summary topics, please feel free to call any of the members of the Financial Markets Unit listed below. FINANCIAL MARKETS UNIT Joseph Cilia(312) 322-2368 Adrian D’Silva(312) 322-5904 TABLE OF CONTENTS Asset Swap Fundamentals . .1 Synthetic Instruments . .1 The Role of Arbitrage . .2 Development of the Asset Swap Market . .2 Asset Swaps and Credit Derivatives . .3 Creating an Asset Swap . .3 Asset Swaps Containing Interest Rate Swaps . .4 Asset Swaps Containing Currency Swaps . .5 Adjustment Asset Swaps . .6 Applied Engineering . .6 Structured Notes . .6 Decomposing Structured Notes . .7 Detailing the Asset Swap . -
Fannie Mae and Freddie Mac in Conservatorship: Frequently Asked Questions
Fannie Mae and Freddie Mac in Conservatorship: Frequently Asked Questions Updated May 31, 2019 Congressional Research Service https://crsreports.congress.gov R44525 Fannie Mae and Freddie Mac in Conservatorship: Frequently Asked Questions Summary Fannie Mae and Freddie Mac are chartered by Congress as government-sponsored enterprises (GSEs) to provide liquidity in the mortgage market and promote homeownership for underserved groups and locations. The GSEs purchase mortgages, retain the credit risk (for a fee), and package them into mortgage-backed securities (MBSs) that they either keep as investments or sell to institutional investors. In the years following the housing and mortgage market turmoil that began around 2007, the GSEs experienced financial difficulty. By 2008, the GSEs’ financial condition had weakened, generating concerns over their ability to meet their combined obligations on $1.2 trillion in bonds and $3.7 trillion in MBSs that they had guaranteed at the time. In response, the Federal Housing Finance Agency (FHFA), the GSEs’ primary regulator, took control of them in a process known as conservatorship. Subject to the terms of the Senior Preferred Stock Purchase Agreements (PSPAs) between the U.S. Treasury and the GSEs, Treasury provided funds to keep the GSEs solvent. The GSEs initially agreed to pay Treasury a 10% cash dividend on funds received, and dividends were suspended for all other GSE stockholders. If the GSEs had enough profit at the end of the quarter, the dividend came out of the profit. When the GSEs did not have enough cash to pay their dividend to Treasury, they asked for additional cash to make the payment instead of issuing additional stock. -
Written Testimony of William Beatty Washington Securities Division Director and Past-President of the North American Securities Administrators Association, Inc
Written Testimony of William Beatty Washington Securities Division Director and Past-President of the North American Securities Administrators Association, Inc. House Committee on Financial Services, Subcommittee on Capital Markets and Government Sponsored Enterprises “The JOBS Act at Four: Examining Its Impact and Proposals to Further Enhance Capital Formation.” April 14, 2016 Washington, D.C. Introduction Good Morning Chairman Garrett, Ranking Member Maloney, and members of the Subcommittee. My name is Bill Beatty. For the past 30 years, I have worked as an attorney in the Securities Division of the Washington State Department of Financial Institutions, and since 2010 I have served as the Department’s Securities Director. I am also a member of the North American Securities Administrators Association, Inc. (“NASAA”),1 having served as the association’s President from 2014 to 2015, and before that, as Chair of its Corporation Finance Section Committee. Since October of 2015, I have served as the Chair of NASAA’s Committee on Small Business Capital Formation. I am honored to testify before the Subcommittee today about legislative proposals to enhance capital formation for small and emerging growth companies. State securities regulators have protected Main Street investors longer than any other securities regulator. Ten of my colleagues are appointed by Secretaries of State, and five are under the jurisdiction of state Attorneys General. Some, like me, are appointed by their Governors and Cabinet officials, and some of my colleagues work for independent commissions or boards. My colleagues and I are responsible for enforcing state securities laws including investigating complaints, examining broker-dealers and investment advisers, registering certain securities offerings, and providing investor education programs to many of your constituents. -
Collateralized Loan Obligations (Clos) July 2021 ASSET MANAGEMENT | FACT SHEET
® Collateralized Loan Obligations (CLOs) July 2021 ASSET MANAGEMENT | FACT SHEET Conning believes that CLOs are a compelling asset class for insurers in today’s market. As floating-rate securities, they offer income protection in varying market environments while also minimizing duration. At the same time, CLO securities (i.e. tranches) typically offer higher yields than similarly rated corporate bonds and other structured products. The asset class also provides strong capital preservation through structural protections and investor-oriented covenants. Historically, the CLO structure has proven to be extremely resilient through multiple market cycles. In fact there has never been a default in the AAA and AA -rated CLO debt tranches.1 Negative correlation to U.S. Treasury Bonds and low correlations to U.S. investment grade corporate bonds and equities present valuable diversification benefits. CLOs also offer an opportunity to access debt issuers that do not participate in the high-yield bond markets. How CLOs Work Team The CLO collateral manager purchases a portfolio of loans (typically 150-300) Andrew Gordon using the proceeds from the sale of CLO tranches (debt & equity). The interest Octagon, CEO earned from the loan collateral pool is used to pay the coupon to the CLO liabili- 37 years of experience ties. The residual cash flow, after paying the interest on the CLO liabilities and all expenses, is distributed to the holders of the CLO equity. Notably, loan portfolio Gretchen Lam, CFA losses are first absorbed by these equity investors. CLOs are typically rated by Octagon, Senior Portfolio Manager S&P, Moody’s and / or Fitch. -
Financial Statements(Non Consolidated)
Bank Presentation Capital and Financial Positions as of June 30, 2009 August 26 2009 Revised on September 4, 2009 Introduction ~ Bank Presentation of Capital and Financial Positions as of June 30, 2009 ~ The Norinchukin Bank has decided to release quarterly financial summary starting this August to help provide a better understanding of the Bank, in addition to the Bank’s previously disclosed capital status based on Basel II standard Financial figures released herein have not been audited by an auditing firm Your understanding of the above would be greatly appreciated as you read through this presentation Financial Highlights as of June 30, 2009 (Non-consolidated) Capital Adequacy Ratio: 17.10%,Tier I Ratio: 11.23% (Preliminary Figures) ¾ The Bank maintains a solid capital position, with a capital adequacy ratio of over 17% Unrealized losses on securities were JPY 1,668.2bn (improved by JPY 424.6bn from the end of March 2009) ¾ The Bank saw a steady improvement in the status of its losses from the revaluation of securities in the first quarter since the launch of the Business Renewal Plan (FY2009 to FY 2012) Ordinary Profits for the fiscal first quarter stood at JPY 78.9bn ¾ Under the Business Renewal Plan (FY2009 to FY 2012), the Bank aims to secure ordinary profits of JPY 50.0bn to JPY100.0bn per annum over the 4 year term Note: The financial figures above have not been audited by an auditing firm. 2 Capital Position (Non-consolidated:Preliminary Figures) ~ A Sound Level of Capital Adequacy ~ The Bank’s Capital Adequacy increased, -
Inflation Expectations and the News
FEDERAL RESERVE BANK OF SAN FRANCISCO WORKING PAPER SERIES Inflation Expectations and the News Michael D. Bauer Federal Reserve Bank of San Francisco March 2014 Working Paper 2014-09 http://www.frbsf.org/economic-research/publications/working-papers/wp2014-09.pdf The views in this paper are solely the responsibility of the authors and should not be interpreted as reflecting the views of the Federal Reserve Bank of San Francisco or the Board of Governors of the Federal Reserve System. Inflation Expectations and the News Michael D. Bauer∗ March 27, 2014 Abstract This paper provides new evidence on the importance of inflation expectations for vari- ation in nominal interest rates, based on both market-based and survey-based measures of inflation expectations. Using the information in TIPS breakeven rates and inflation swap rates, I document that movements in inflation compensation are important for explaining variation in long-term nominal interest rates, both unconditionally as well as conditionally on macroeconomic data surprises. Daily changes in inflation compensation and changes in long-term nominal rates generally display a close statistical relationship. The sensitivity of inflation compensation to macroeconomic data surprises is substantial, and it explains a sizable share of the macro response of nominal rates. The paper also documents that survey expectations of inflation exhibit significant comovement with variation in nominal interest rates, as well as significant responses to macroeconomic news. Keywords: inflation expectations, macroeconomic