Making The Most Of A Difficult Market: Public Offering Structures That Maximize Flexibility And Limit Risk

Introduction

The recent turmoil in the capital markets has made capital raising extremely challenging for all kinds of issuers, with many finding that traditional public offerings are not a currently viable option. In a volatile capital market, it is critical for issuers seeking equity financing to be able to act quickly when presented with favorable market conditions, to avoid the potential downward pressure on stock prices that accompanies the announcement of a traditional offering, and to manage market and investor expectations regarding offering size and price. "Registered direct" offerings and "at-the-market" offerings are offering structures that enable public issuers and placement agents to quickly and discreetly raise capital while realizing all of the foregoing advantages. This advisory describes the characteristics of these offering types, and summarizes some of the advantages, costs, legal and business issues that issuers and placement agents may want to