To fund her upcoming ERAS tour across the United States of America, Taylor Swift started

discussions with her company employees about the numerous ways of raising finance.

The experts in her company informed her that the quickest way of raising finance was by taking
debt from the Banks, a practice she had done before every tour she performed. While the idea
appealed to her, she was hit with a personal moral problem - how to enrich the fan experience?
How to make sure fans get more than what they thought they could?

She informed her executives that she was looking for a way to cut the Banks out of the equation
without compromising on raising as much money as she would've risen from the Banks. This idea
did not sit right with the executives, as they thought it was almost impossible to do that. They try
to talk her out of it, but her response was straightforward, “Shake it off”. Well, all except one
person named Travis Kelce.

Travis worked as CFO (Chief Financial Officer) for several companies. He helped startups raise
finance, and several private companies go public. His track record is impressive, and he has
recently joined Taylor Swift's company.

His idea was this: Raising money through the issue of debt securities - bonds and debentures. He
suggested that they issue convertible and non-convertible securities so that she could control who
could become an owner of the company (assuming she wanted to compromise on control). She
can raise much more money than the banks could give her.

The other executives of the company were not in favour of his idea. They flagged several
concerns like:
a. The interest rates that are present.
b. The problem of asking people to become owners of the company
c. The inability to provide them to a few private players
d. The whole process of becoming a trading company without actually issuing shares.

Although excited about Travis's idea, Taylor was genuinely concerned about these issues. There
are perceivable problems that have to be addressed before she can take a call on whether or not
to raise finance through this route. She asked Travis the following questions:

1. Can a company that has not given shares raise finance through issuing bonds?

2. What are ‘convertible securities’? What conditions need to be satisfied before one can provide
such securities? When can they be converted? When can they not be issued?

3. If debt securities can be issued before shares, can those be given to a select few? If so, how?

4. If debt securities are to be issued by the public, provided they are allowed, what conditions
must be satisfied before one provides them in such a way and what is the process involved?

Travis, a corporate law advisor, approached you to address Taylor’s question. Provide your opinion
on these matters and suggest the best way of raising finance.