This week we continue our conversation with Martin Fridson, chief investment officer, Lehmann Livian Fridson Advisors. Fridson is “perhaps the most well-known figure in the high yield world,” according to Investment Dealers’ Digest. His firm is a registered investment adviser based in New York City and Miami, managing investment portfolios for investors across the US.
Second of two parts – View part one
TheLeadLeft: What’s the issue with “144a for life” registration rights?
Martin Fridson: For a number of years the dominant form of high-yield new issuance has been to offer a 144a, which is a private placement, but attach registration rights. The investor ends up with a fully registered deal, but the issuer can get into a market window that might close if the registration has to be done up-front. Eventually, issuers started doing 144a deals without registration rights and that practice has escalated recently. It’s another gain for the issuer, who saves the expense of registering the deal. Investors don’t view it as a disaster if the company is public or has other public issues outstanding such that it has to provide regular financial reports.