litigation

Private Financing in a Global Market

The emerging global market and the new structured financing therein, the time was right to come together with others to provide a diversified service to quality clients. In foreign markets the bond market was greatly used due to the fact that the average businessman could not go into a bank and get neither a loan nor even a mortgage like they could in the US. What they had were corporations that could issue the bonds and assets that could credit enhance them i.e. collateral or assets. Governments would use the bond route frequently. If the corporation wanted the funds for its on going operations and had its own credit, then it would issue them directly to buyers. If a special project needed funding then a special purpose company would be formed to receive the credit enhancement and issue the bonds. It might be surprising to know that in the US there are more bonds on the market than stock. The general model is the same but each company is different and so is the project both of which require specific structuring. In 2006 over 1 trillion bonds were sold and of those there were only 750 million that were investment grade rated.

Typical cross border transaction would be a Company from Argentina owning a Luxemburg corporation along with other companies to give it value. They decide to do a project in the US so they form a US SPC to issue bonds. They then credit enhance the SPC by a deposit of stock in a US trustee bank that backs the bonds.

A good business plan serves the basis for the PPM whether it is to sell stock or bonds. We must have one for all the projects that fits a model. We draft the plan or assist in conforming it to the model. This makes it less time consuming and a smoother transaction for the many parties involved to understand. This plan will include credit enhancement for the bond offering if we need it. We arrange and pay a deposit for the enhancement.

We hire and negotiate securities and/or bond counsel’s contract and retainer. We have a good relationship with many so it is possible to consult with them before paying any retainer to make sure the plan is feasible. They will usually consult with their favorite investment banks as well. To reduce that cost, we are more than capable of drafting a PPM and working with the investment banks. Obviously the securities attorney will make some changes, but he is the one that is needed for an opinion. However, we can reduce costs here due to our knowledge and experience.

We hire and arrange the underwriter and pay the deposits. This can be one or as the lead for several independents. We hire all other necessary professionals and in fact over see the whole transaction from beginning to end as the consultant and project manager. We almost always assist them in structuring a private placement of equity or debt exempt from Registration with the SEC pursuant to Reg. D. Rule 144 . We pay for and SEC or Blue Sky filings, printing, travel, telephone and other costs associated with the offering. We in effect, manage the process form beginning to end. This takes pressure off management and the worry of whether the right decision is being made. We are your stress reducers in acting as corporate counsel.