IPO question Chinese Solar company why do IPO in USA or China?

? USA - more green demand, roadshow in USA = marketing effort (increase brand awareness in US) b/c most visible phase for the company Asia - hotter market, lower fees to IB (3%), greater awareness of the company, less market cost, Chinese company = Chinese consumers + producers 7.5M IPO does not include the green shoe 7% fees, remember IPO discount Calculate proceeds to primary and secondary shareholders G.S. additional 15% of IPO shares Outline HF + PE Industry Hedge Fund: GP/LP, 2/20, unregulated due to Rule 40, every year there is a payment, up and down, 45 day notice to exit (more liquid than PE), HF becoming activist (more like PE); lot more turnover in industry (1000 go out of business/year), wealthy investors institutions, more regulation expected Private Equity: GP/LP, 2/20, long-term, LUMPY, approx. 10 year fund, FIND/BUY/FIX/SELL, biggest users of HY, PE going public

Volcker separates PE/HF from IBs Section on HY Rule 415 shelf registration? Originated when interest rates were very high and markets were very volatile (by the time you filed your registration the markets would move a lot). Allows companies who are large issuers of high quality debt that already report under the 34 act to file a shelf for 2 years. Rule 415 developed capital markets divisions within banks (as a result, changed relative bargaining power of issuers vs. IBs) Negotiated deal negotiating with bankers on terms (softer factors industry knowledge, relationships, past experience), term negotiations will come after the issuer picks an underwriter Competitive deal instituted after shelf registration, method where best bid wins issuer will give banks their terms and bond characteristics and then banks will submit their bids. The bank with the lowest interest cost will win the deal. Why is 144a rule good? When companies do private placements, 144a allows them to trade bonds publically after a certain amount of time (6 months) allows companies to quickly do private placements outside of public scrutiny

Why is the negotiations method still used? Just b/c a bank is willing to give you a lower rate doesnt mean that it is the best bank for you to choose must think about reputation, past experience, etc. Relationships matter Why does incurrence covenant matter (also know maintenance)? With highly levered companies B/S hierarchy matters you must be ensured that if the company takes on more debt your claims will still be higher than the newly raised debt Maintenance covenants have to do with financial performance (leverage ratios, interest coverage, minimum EBITDA, etc.) more important for maintaining your credit rating If you are a CFO, what are the future prospects for leveraged lending industry?
Future of HY Industry big in Europe b/c of govt defaults? Treasury is at all-time lows, HY PE in China will bolster HY market Bad economy = vulture/distressed HFs buying shit Banks will start lending when economy improves so PE will start buying, companies will start using HY as economy improves