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A Placement Agreement sets out the terms when a company offers its shares or other securities to specific investors in New Zealand. It's the key contract between the issuing company and the investment bank or broker managing the private placement of those securities.

These agreements play a crucial role under NZ's Financial Markets Conduct Act 2013, spelling out important details like pricing, timing, and who can buy the securities. They help companies raise capital while protecting both the business and its investors through clear terms and proper disclosure requirements. Investment banks often use them for wholesale offerings to sophisticated or institutional investors.

Use a Placement Agreement when your company needs to raise capital through a private offering of shares or securities to select investors in New Zealand. This becomes essential during expansion phases, when seeking strategic investors, or if your business requires significant funding but isn't ready for a public offering.

The agreement comes into play specifically when working with investment banks or brokers to manage the placement process. It's particularly valuable for mid-to-large companies targeting institutional investors, private equity firms, or high-net-worth individuals under NZ's Financial Markets Conduct Act requirements. Having clear terms protects both parties and streamlines the capital raising process.

• Standard Private Placement: The most common type, used for offering shares to select institutional investors or high-net-worth individuals. Includes detailed pricing and allocation terms.
• Accelerated Placement: A faster version designed for quick capital raising, often completed within 24-48 hours. Features streamlined terms and execution processes.
• Convertible Note Placement: Specifically structured for offering convertible securities, with terms covering conversion rights and triggers.
• Rights Issue Placement: Used when offering new shares to existing shareholders, including detailed entitlement and shortfall allocation provisions.

• Issuing Companies: Businesses seeking to raise capital through private share placements, usually mid to large-sized corporations looking for significant investment.
• Investment Banks: Lead managers who structure the placement, find suitable investors, and ensure compliance with NZ financial regulations.
• Corporate Lawyers: Draft and review the Placement Agreement terms, ensuring legal compliance and protection for all parties.
• Institutional Investors: Professional investors, fund managers, and investment firms who participate in the placement.
• Financial Markets Authority: Oversees compliance with securities laws and placement regulations.

• Company Details: Gather full legal name, registration numbers, and authorized representatives who will sign the agreement.
• Placement Terms: Determine security type, issue price, total placement size, and minimum investment amounts.
• Investor Criteria: Define eligible investor categories under NZ law and any specific requirements or exclusions.
• Timeline: Set key dates for the placement, including opening, closing, and settlement periods.
• Due Diligence: Compile company financials, shareholding structure, and relevant corporate approvals.
• Risk Factors: Document business risks and market conditions affecting the placement.

• Parties & Definitions: Full legal names, roles, and key terms used throughout the agreement.
• Securities Details: Type, quantity, price, and total value of securities being placed.
• Placement Terms: Offer structure, timing, allocation process, and settlement procedures.
• Representations & Warranties: Company's legal status, authority to issue securities, and accuracy of information.
• Conditions Precedent: Requirements before placement completion, including regulatory approvals.
• Fees & Expenses: Payment terms for placement agents and associated costs.
• Termination Rights: Circumstances allowing either party to end the agreement.

A Placement Agreement differs significantly from an Bond Issuance Agreement in several key aspects, though both deal with raising capital. Understanding these differences helps choose the right instrument for your funding needs.

• Investment Type: Placement Agreements typically deal with equity securities or shares, while Bond Issuance Agreements specifically handle debt instruments.
• Investor Rights: Bond holders receive guaranteed interest payments and principal repayment, whereas placement investors get ownership rights but no guaranteed returns.
• Duration: Bond Issuance Agreements have fixed maturity dates and repayment schedules. Placement Agreements create permanent ownership unless shares are later sold.
• Regulatory Framework: Under NZ law, bond issuances face different disclosure requirements and investor protections compared to private placements.
• Risk Profile: Bonds typically offer lower risk and fixed returns, while placements carry higher risk but potential for greater returns through capital appreciation.