Regulation S offerings are a popular way for companies to raise capital, whether debt or equity. Regulation S, or “regulation s”, or “Reg S” offerings are commonly referred to as offshore offering. Typically, in a Reg S offering a company will seek to raise capital from non-U.S. residents. Since the Regulation S is ‘offshore’, U.S. residents are barred from such investments, unless the offering memorandum and the offering itself consist of a 144A aspect.
Reg S offerings are popular for companies worldwide to raise capital. Often, companies outside the United States will draft the proper Reg S private placement memorandum or offering memorandum or prospectus and raise capital from non-US investors. The Reg S rules are different than other types of offering rules. For instance, in a Reg S offering, not only should a US resident living in the US not be contacted, but even a US citizen living outside the US borders be solicited for funds in a Reg S offering.
As noted, many companies conducting a bond offering or equity offering under the rules of Regulation S often incorporate the 144A aspect. Essentially, a 144A offering allows for the sale of securities to US residents. Thus, for example, if a bond offering is structured under Reg S so that non-US investors can invest, the 144A would also be included so that US residents, too, can invest.
Regulation S and 144A
Regulation S and 144A offerings are arguably mutually exclusive by nature. That is, if a company is selling and offering securities under Reg S, that implies that the company does not want US investors. If one is conducting a 144A bond offering and not a Reg S offering, that implies the company only wants US investors. Mixing a Regulation S and 144A is a solid way to raise debt capital and equity and is quite common.
WOJ can structure your Regulation S offering or 144A.
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