SEC 144A Bond Sidecars

Any bond experts out there? I’ve noticed that sometimes one can find a QIB bond with a sidecar. That is an identical bond to the 144A issue but with a different CUSIP that trade retail. I’m assuming that means a percentage of the issue was made available to the public. How does that process work? Are the sidecars treated identically in bankruptcy. Any information or links to discussion on the topic is appreciated. Thanks.

Are you talking about the long Hertz’s, I think '26 or '28’s? Anyhow, I’m not particularly good with bankruptcies that’s typically its own niche, but in theory (and generally by law) it should be treated the same. Sometimes, it is possible in big complex deals that is possibly you get disadvantaged by not being in the same CUSIP as the big institutional names as they lobby in less obvious ways, but generally in most cases all unsecured is treated the same and all equally tiered secured, etc.

Hey, Thanks for the response. I’ve run into the scenario a few times. I’m currently looking at-


You’ll notice the first security is the restricted QIB only security. The second one listed is available to anybody.

You’ll also notice they are identical in every way. Same issue date. Same priority. Terms. Both 2L secured. If the offering was made under rule 144A, how do the unrestricted bonds come to exist? There must be some sort of work around. I’m particularly interested in the mechanics of that work around. And as you pointed out, the two bonds hold the same priority, so they “should” be treated the same in bankruptcy, but QIBs have sometimes been privileged by PSAs. So I would think that may be a concern in owning the unrestricted bond…

I wish I had more for you, but don’t actually understand either why they come to exist. Once issued, I don’t think there’s a work around to change the status though.