Securities offerings: a different way for businesses to raise capital

Jim Fujinaga
November 13, 2018
Helping clients grow their businesses is central to our mission at Hancock Whitney. A big part of that effort involves traditional bank lending. Yet when our clients look to raise capital outside the traditional bank credit arena — by issuing debt or equity — there’s another role we can play: co-manager in securities offerings.
 
Through Hancock Whitney Investment Services, Inc., our broker-dealer affiliate, we have been participating in our clients’ securities offerings as a co-manager for the last couple years. Since April 2017, at the request of our clients, we've been included as a co-manager in 14 such transactions with an aggregate value of nearly $7 billion.
 
The representative deals below highlight some of our clients who have chosen to include us as a co-manager in their securities offerings. While many of the deals have involved oil and gas clients, we are also able to participate as co-manager on deals involving state and local governments, health care companies, higher education organizations and others.
 
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Role of a co-manager
Securities offerings generally require a team of banks performing different underwriting roles, known as a “syndicate.” The lead underwriter or underwriters in the syndicate are responsible for duties such as arranging the issuance and managing the entire offering process, advising the issuer on the structure and timing of the issue, and marketing and distributing the securities. Lead underwriters are most often major Wall Street firms.
 
Co-managers in these offerings play various supporting roles, including, for example, sharing a portion of the risk of underwriting the issue with the lead underwriter(s) and standing by with the necessary capital to purchase and sell a portion of the issue.

Capital and experience
Securities offerings often have multiple co-managers that provide varying types and degrees of support to the lead underwriters.   
 
A broker-dealer must meet certain capital ratios to participate as a co-manager in securities offerings, so small institutions typically don’t act as co-managers. In addition to adequate capital, a broker-dealer must have appropriately licensed individuals with the experience to conduct the due diligence necessary to be a co-manager. We're pleased to be able to assure our clients that we have the requisite capital, licensing and experience to participate as co-manager.
 
Nimble and quick
Another important capability required of a co-manager is to be nimble and quick. Once a lead underwriter makes a public announcement of the issue and at the direction of the issuer invites potential co-managers to participate, the invited firms often have a very limited amount of time to confirm their intention to do so.
 
We are organized to respond to these invitations by quickly convening our due diligence committee, even in the evening and on weekends. In the case of a bond issuance, we are prepared to conduct initial due diligence and promptly give a thumbs up or down on our participation within the short time frames typical of these transactions.

Relationship builder
We appreciate the opportunity to participate as a co-manager and build our client relationships. We can also serve as a client’s liaison with a lead underwriter, through relationships we’ve developed with some of the larger investment banking firms.
 
To learn more about how we can participate in your debt or equity offering, contact your Hancock Whitney relationship manager.

 
Corporate and Municipal Underwriting is offered through Hancock Whitney Investment Services, Inc. Hancock Whitney Investment Services, Inc. is a registered broker/dealer, member of FINRA/SIPC and a Registered Investment Adviser. Hancock Whitney Investment Services, Inc. is a wholly owned subsidiary of Hancock Whitney Corporation.
 
Securities and Insurance Products:
NO BANK GUARANTEE NOT A DEPOSIT MAY LOSE VALUE NOT FDIC INSURED
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY

 


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