Due Diligence in a Rule 144A / Regulation S Offering


Rule 144A (17 CFR 230.144A) securities are purchased only by qualified institutional buyers, or “QIB”s, which are typically among the most sophisticated institutional investors. The related portion of the offering sold under Regulation S is typically sold to sophisticated institutional investors located outside the U.S. The offering documentation, due diligence, legal opinions and comfort letters for Rule 144A/Regulation S debt offerings are often very similar in many respects to those provided in registered offerings. Below we focus on the due diligence process that is conducted by the initial purchasers and their counsel.