Whether through registered public offerings or private placements, hybrid securities that combine the attributes of equity and debt can present special concerns for the issuer and current shareholders. Even when these concerns are identified and overcome, careful attention to the details of the issue will be necessary to avoid interfering with the eligibility standards for listing a public company's shares on Nasdaq and NYSE/Amex.
Careful Attention to Detail in Preferred Stock and Hybrid Debt-Equity Issues
To work with securities lawyers experienced with balancing the multiple considerations that affect the decision to issue convertible debentures, notes, preferred stock or other securities to advance funding goals, contact Gottbetter & Partners, LLP, in New York. In most situations, a convertible issue is necessary to attract new investment when an issue of common shares or other equity assets cannot obtain sufficient traction in the market. Our experience with the negotiation of conversion or option terms, together with our ability to manage the structure of the transaction, can go far to preserve and maximize the equity attributes of the issue.
It is generally in the issuer's interest to protect the equity character of the issue to the greatest extent possible. Not only does this minimize the prospect of future disruption to the current capital structure when conversion rights vest, it also protects the issue's eligibility for trading on Nasdaq, NSYE/Amex and other major exchanges.
Our attorneys advise clients about their full range of negotiating options for structured financings and placement of hybrid securities, including:
- Preferred stock
- Convertible equity and convertible debentures
- Options and warrants
- Hybrid securities comprised of both equity and debt elements
For additional information about G&P's experience with the negotiation, characterization and documentation of convertible or hybrid securities, contact our office in New York.
