Question

What is a shelf registration? What purpose does it serve for bond issuers? How have shelf registrations impacted investment banks? How have shelf registrations impacted bond issuers? (6 points)

Answer 1

Shelf registration is a process which help in in publicly traded company to register their new stock offerings without having to issue them. It can be registered for 2 years before the actual stock offerings.

It help bond holders by providing a better liquidity and a better sense for estimation of the companies working to the bond holders of the company. It also means that dilution for equity is also around the corner and bondholder need to be more secured.

Shelf registration is impacting the investment banks as when self registration is made it means that and dilution is around the corner and it is not good for the investment banks as they cannot advocate to buy the shares of the company as it is contradictory to their beliefs.

Shelf registration is also impacted bond issuers these are majorly corporates who offers for a self registration indicating that a dilution of shareholder is around the corner and this is good for the bondholders of the company.