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Technology Stocks : Ampex Corporation (AEXCA) -- Ignore unavailable to you. Want to Upgrade?

To: WAI who wrote (3487)	9/22/1998 5:04:00 PM
From: killybegs	Respond to of 17679

This isn't precise, but essentially, 144a allows for a reasonably quick raise of money without the hassle of having to file a registration statement with the SEC and burning up a lot of time waiting for an effective registration and proceeding with the offering of bonds. This way you place with a small number of institutions and get the money. Then the exchange allows for those holders to get freely transferable registered bonds. By the way, the most important thing is they raised their money. This deal wouldn't be done now because of market conditions. Also, re questions about the interest rate...I have written on this before. However, it comes down to this: Which is the better deal? Borrow 12%, unsecured with no strings attached as to use of proceeds or borrow at 8%, putting, say, your patent portfolio, as directly secured collateral with your lender having veto power over acquisitions etc. Re a 7% convertible, don't look at the interest rate. what are the terms of the conversion price into equity. If I borrow money at 7% but can dilute my equity 25% or 50% or more under certain conditions, then 7% wasn't such a hot deal. You gotta read the fine print.