Incapital Long Execution of Preferred and Related Debt Securities (LEOPARDS™) are a product extension of Incapital’s continuously offered note program. Through the Incapital LEOPARDS™ program, individual preferred security or baby bond offerings typically have a one week marketing period, as with a traditional note program, and have the flexibility to reopen multiple times for up to several months.
The structure and pricing are set prior to announcement. If reopened, the same security is offered each subsequent week at a price of par plus accrued dividends or interest. Accrued is calculated from that week’s trade date (preferreds) or settlement date (bonds) back to the original settlement date.
Instead of the usual 30 day exchange listing period, Incapital LEOPARDS™ may have a 30 to 90 day listing period from the original settlement. The offering remains in syndicate until permanently closed, allowing for multiple weeks of execution prior to the listing requirement. There is no guarantee that a secondary market will be made or maintained.
Preferreds are amenable to a continuously offered program for many reasons. Preferred security pricing is ordinarily less sensitive to interest rate volatility when compared to senior debt, which may be beneficial for extended offering periods. Also, in traditional preferred “benchmark” executions, underwriters typically market a security that appeals to a range of investors including retail, accredited investors and institutional investors in order to achieve a large transaction over a relatively short period of time. Incapital LEOPARDS™ allow issuers to focus on the retail segment through multiple reopenings with size accumulation over time. Additionally, large institutions cannot exercise leverage over the order book with regard to price, structure or supply.
“Bulge Bracket” firms typically focus on accounts that reside within their individual distribution systems. Incapital’s diverse distribution network of more than 800 broker-dealers, institutions, asset managers, RIAs and banks reaches those with unmet demand who are traditionally under-allocated.
The securities issued through the Incapital LEOPARDS™ program take on the associated risks of those securities, such as risk of loss of principal, market risk, credit risk and default risk of the issuer.
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