Rescue financing leads to rapid evolution of PIPEs

Author: John Crabb | Published: 1 May 2020

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Volumes of private investments in public equities – or PIPE – transactions have seen a significant spike in the weeks and months since the Covid-19 crisis took hold of the economy. The types of investors entering into these transactions is also evolving.

By the end of April 2019, 304 PIPEs had raised $10.8 billion for corporates in the US markets. Over the same time period this year, there were 358 deals raising $20.7 billion: a significant number with echoes of the 1,206 PIPE transactions in 2008.

At the beginning of March, when the volatility really started, corporates began to question how they were going to stay afloat in such uncertain times. "As March progressed it was more around lines of, 'ok what do I do, how do I raise capital?'," said Angus Whelchel, global head of private capital markets at Barclays. "Corporates...