31. As the economic conditions recovered in 1995 and peaked in mid 1998, the tax-deductible mandatory convertible and the tax-deductible nonmandatory convertible preferred increased in importance. Issuance of traditional convertible debt declined substantially in 1998 and came to a virtual halt following the Russian government bond default in mid-1998 and the Asian/emerging market contagion then in full swing. Convertible financing in the first half of 1999 was off significantly from that of the previous year, due to fears of rising interest rates but spurted in the last quarter of 1999 amid a recovery and start of the boom cycle. Convertible debt as a percent of total issuance jumped up to more than 80% in 2000 and 2001. With the burst of the Internet bubble, preferred share structures returned in favor at 42% of total gross proceeds in 2002. However, 2003 saw the resumption of the dominance of convertible debt issues, particularly the zero coupon/part coupon/CoCo structures, as interest rates continued to be extremely low in real terms. The CoCo bubble was burst by the FASB change cited earlier.

32. As an alternative to a US SEC registered offering which can be sold to any investor, including individual investors, 144A issues can be publicized, sold, or resold only to the larger institutional investors and Qualified Institutional Buyers (QIBs). This avenue, available to SEC registrant firms who are current with respect to filing financial reports with the SEC or those that agree to make the financial reports available to investors, allows new issue or secondary transactions to be executed without having to undergo the time-consuming registration process.