Financial Contracts in PIPE Offerings: The Role of Expert Placement Agents
We examine how Private Investment in Public Equity (PIPE) contracts allocate contingent cash flow rights between investors and issuers and the role of placement agents in PIPE contract design. Issuers advised by expert agents agree to more investor-friendly terms than issuers advised by nonexpert agents. Expert agents appear to help issuers understand the payoff consequences of negotiable terms. M