Introducing STEP
Structured Term Equity Placement is an innovatve facility designed by Diamond Halpern Capital for public companies with solid growth prospects. This structure is designed with the company in mind, with many benefits over traditional facilities, including a lower cost-of-capital, trading limits to minimize overhang, no roadshow and an expedited path to closing.
In a STEP facility, a company is provided funds in tranches at a simple discount to the market. In many respects, it is similar to a registered direct. However, the investor is able to charge a lower discount to the company because the capital is provided in tranches. Additionally, our typical structure has no warrants; thus the overall cost of the facility is generally significantly lower than that achievable via a registered direct. Furthermore, by selling shares in tranches over time, rather than all at once, the company can benefit from a rising share price, which would further lower the cost of capital. In contrast to a registered direct, the STEP facility is designed to add stock into the market at a modest rate, and incorporates strict trading limits on the investors. These protections help prevent overhang and can have a meaningful benefit relative to traditional facilities.
- STEP or Structured Term Equity Placement is an innovative facility offered to public issuers wth a shelf registration in place.
- STEP is a series of products and/or combination of prodcts used to provide the company with a solution designed to meet the issuer's specific capital needs.
- STEP is designed for companies who believe that their fundamental business prospects are improving. Otherwise a one point in time facility, such as a registered direct, should be considered.
- STEP is for an issuer who may need a portion of its capital up front, with periodic tranche financings providing the bulk of the funds over time.
- STEP is non-toxic and puts less pressure on shares than most traditional financing methods.
- STEP offers an expedited closing process and eliminates the need for a time consuming road show.