Liquidity buffer and PIPE: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Add definition - source - Goldman Sachs - https://www.gsam.com/content/dam/gsam/pdfs/us/en/fund-literature/brochure/GSAM_WLA_disclosure_US.pdf?sa=n&rd=n)
 
imported>Doug Williamson
(Expand quote - source - Reuters - https://www.reuters.com/business/aerospace-defense/bransons-virgin-orbit-list-via-spac-merger-32-bln-valuation-2021-08-23/)
 
Line 1: Line 1:
1.  ''Banking''.
''Special purpose vehicles - acquisitions - Special Purpose Acquisition Companies - private equity.''


A stock of unencumbered high quality liquid assets, held to protect against failure under liquidity stress.
Abbreviation for Private Investment in Public Equity.


A PIPE is an arrangement in which private financial investors take minority stakes in a SPAC, at a discount to the market price of the SPAC’s shares.


2.  ''Money market funds''.
The purpose is to support the financing of the SPAC's combination with its acquisition target.


A stock of high quality liquid assets, held to support the fund's liquidity in case of high levels of redemptions.


Liquidity buffers can include cash, public debt, and other sufficiently liquid assets.
:<span style="color:#4B0082">'''''Example - Virgin Orbit's $100m PIPE'''''</span>
 
:"Virgin Orbit, a small satellite launch service provider, is going public through a merger with a blank-check vehicle that values it at about $3.2 billion.
 
:The deal with NextGen Acquisition Corp. II, announced on Monday, includes $100 million in funding from Boeing Co, AE Industrial Partners and others in the form of private investment in public equity, or PIPE...
 
:Spun-off from Branson's space tourism company Virgin Galactic Holdings Inc in 2017, Virgin Orbit reached space for the first time in January when it delivered ten NASA satellites to orbit, after a failed attempt last year.
 
:The deal is expected to provide $483 million in proceeds to the combined company, which will list on the Nasdaq under the symbol "VORB" after the merger."
 
:''Source - Reuters - 24 August 2021''




== See also ==
== See also ==
* [[Buffer]]
* [[De-SPAC]]
* [[Capital]]
* [[Dilution]]
* [[Capital Conservation Buffer]]
* [[Disclosure]]
* [[Cash and cash equivalents]]
* [[Initial public offering]]
* [[Countercyclical buffer]]
* [[Operating company]]
* [[Daily liquid assets]] (DLA)
* [[Private equity]]
* [[High Quality Liquid Assets]] (HQLAs)
* [[Public company]]
* [[LAB]]
* [[Reverse takeover]]
* [[Level 1 liquid assets]]
* [[Shell company]]
* [[Level 2 liquid assets]]
* [[SPAC]]
* [[Liquidity]]
* [[Liquidity Coverage Ratio]]
* [[Money market fund]]  (MMF)
* [[Redemption]]
* [[Redemption gate]]
* [[Stress]]
* [[Survival period]]
* [[Unencumbered]]
* [[Weekly liquid assets]]  (WLA)


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Identify_and_assess_risks]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Risk_reporting]]
[[Category:Liquidity_management]]

Revision as of 15:03, 24 August 2021

Special purpose vehicles - acquisitions - Special Purpose Acquisition Companies - private equity.

Abbreviation for Private Investment in Public Equity.

A PIPE is an arrangement in which private financial investors take minority stakes in a SPAC, at a discount to the market price of the SPAC’s shares.

The purpose is to support the financing of the SPAC's combination with its acquisition target.


Example - Virgin Orbit's $100m PIPE
"Virgin Orbit, a small satellite launch service provider, is going public through a merger with a blank-check vehicle that values it at about $3.2 billion.
The deal with NextGen Acquisition Corp. II, announced on Monday, includes $100 million in funding from Boeing Co, AE Industrial Partners and others in the form of private investment in public equity, or PIPE...
Spun-off from Branson's space tourism company Virgin Galactic Holdings Inc in 2017, Virgin Orbit reached space for the first time in January when it delivered ten NASA satellites to orbit, after a failed attempt last year.
The deal is expected to provide $483 million in proceeds to the combined company, which will list on the Nasdaq under the symbol "VORB" after the merger."
Source - Reuters - 24 August 2021


See also