The Division of Economic Research released an updated study regarding capital raised in the United States through unregistered offerings.
The study notes that in 2014 more than $2 trillion in proceeds were raised through exempt offerings, largely through offerings made in reliance on Regulation D. The information was collected principally from Form D filings. Although in reporting data, the study looks at amounts raised in offerings made in reliance on Regulation D, Rule 144A, Regulation S, Regulation A and Section 4(a)(2). By contrast, in 2014, $1.35 trillion was raised in SEC-registered offerings.
In 2014, based on these filings, there were 33,429 Regulation D offerings. Foreign issuers accounted for 20% of the total amount raised during 2014 and came principally from Canada, Cayman Islands and Israel. This information is, in our experience, quite incomplete. Most non-U.S.-domiciled issuers access the U.S. institutional investor market through cross-border debt placements and these are made in reliance on Section 4(a)(2). These transactions, which are often referred to as "insurance private placements" or "cross-border privates" are substantial.
The study notes that since September 2013 (effectiveness date), the amounts raised in reliance on 506(c) offerings through 2014 was only 2% of the total amount cited above, or $33 billion
The study contains many useful charts segmenting data and findings. It can be accessed here: https://www.sec.gov/dera/staff-papers/white-papers/unregistered-offering10-2015.pdf.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
© Morrison & Foerster LLP. All rights reserved
