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Cash-box funding vehicles are, for obvious reasons, difficult to market. The basic investment premise of cutting a check purely on the belief of a particular management team’s investment acumen is flawed by the logic of sell now, buy later when the capital raised has actually been invested.
Investment banks commit capital to block purchases with full understanding of the rules of engagement, such as legal and regulatory compliance. The rules are well defined and so frequently orchestrated that execution is rote: cheque cut at agreed purchase price and offload to investors at some premium to purchase to extract a profit.
Tesla Motors founder Elon Musk has taken another big step towards making his bold vision for the electric car maker a reality by completing a US$2bn dual-tranche convertible bond financing. Runaway investor demand meant that Tesla was able not only to price at the tight end of launch terms but also upsize the deal – despite launch
- UTI delivers new capital structure
- S&P Dow Jones Indices drops BDCs, complicating funding
- AEP secures US$750m on pre-IPO CB
- American Energy secures US$750m on pre-IPO CB
- Herbalife lands US$1bn CB
- NRG Yield aligns payouts with growth
- EQUITIES: Apollo upsizes sell-down of Athlon Energy