What is the difference between an offering memorandum and a prospectus?

An offering memorandum is a document private companies use to raise capital through a private placement offering. It provides detailed information about the company. On the other hand, a prospectus is a document used by public companies to sell securities to the public through an initial public offering (IPO) or a secondary offering.

What is a prospectus & how does it work?

All forms of prospectus exist to attract or inform clients, members, buyers, or investors. The Securities and Exchange Commission requires that security issuers file a prospectus when offering investment securities to the public. The prospectus provides details about the investment/security and the offering.

What is an example of a prospectus for an offering?

As an example of a prospectus for an offering, PNC Financial ( PNC) filed a prospectus with the Securities and Exchange Commission in 2019 requesting a new issuance of debt. The senior note being offered to the public is a bond or a promissory note to pay a specific yield by maturity.