Top 10 Practice Tips: Convertible Note Offerings

Summary

This Top 10 Practice Tips provides key practice tips for launching and running a convertible note offering. Convertible note offerings can appear simple in concept, typically with few, if any, covenants to negotiate and disclosure requirements that generally track those of equity offerings. Yet the technical complexity of the conversion features and related matters can quickly become overwhelming. Like any securities offering, you will need to prepare a disclosure document and handle an array of other standard transaction items, including the negotiation of a purchase agreement and diligence matters. However, convertible note offerings are unique in that they include aspects of both equity offerings (e.g., a green shoe) and note offerings (e.g., the description of notes section summarizing the terms of the notes and the indenture governing the notes).