Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Solectron Corp. made two recent trips to the stock market and raised $1.1 billion through a complex financial tool known as an adjustable conversation rate equity security. Milpitas, Calif.-based Solectron is the first technology company to raise money using the financial instrument, which could also be called a mandatory convertible debt security, said Thomas Ivey, a partner at New York-based Skadden, Arps, Slate, Meagher & Flom. Skadden and investment bank Goldman, Sachs & Co. developed the security about two years ago. The instrument enables companies to raise large amounts of cash up front from investors who promise to buy stock in three years. To assure the company that the stock purchase will happen, investors buy a five-year bond and pledge it to the company. In return, the company pays the investors quarterly interest payments on the bond. Hedge funds are the primary buyers of the security, which consists of the two components — the cash to the company and the purchase of the five-year bond. “It’s a very complex, complicated instrument but both teams pulled together and the company was really great in being open-minded about the security,” Ivey said. Ivey represented Goldman in the deal, which initially raised $1 billion in late December and another $100 million in a final closing Jan. 8. His team included New York partners John Osborn, a derivatives specialist, and Charles Morgan, a tax lawyer. Los Angeles corporate partner Nicholas Saggese pitched in along with associates Rick Madden from L.A. and Nicole Morath in Palo Alto, Calif. Solectron’s legal team comprised Steven Bochner and Daniel Weiser, both of whom are partners at Palo Alto-based Wilson Sonsini Goodrich & Rosati.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.