Also known as a private equity line financing or a private equity line of credit. A transaction in which an investor commits to buy equity securities from a company in a private placement, and the company has the right to draw down on the investor's commitment (in other words, to put the securities to the investor) periodically during a specified term. When the company and investor enter into their written private equity line agreement, the company files a resale registration statement with the SEC covering the investor's future resales of the securities it has committed to purchase under the agreement. The SEC issued a Compliance & Disclosure Interpretation concerning private equity lines on November 16, 2020. Under new C&DI Question 139.13, SEC staff provides that it analyzes private equity line financings as indirect primary offerings, even though the "resale" form of registration is sought in such financings. The at-the-market limitations contained in Securities Act Rule 415(a)(4) would otherwise prohibit market-based formula pricing for issuers that are not eligible to conduct primary offerings on Form S-3 or Form F-3. However, SEC staff will not object to companies registering the "resale" of the securities prior to the exercise of the equity line put if the transactions meet the following conditions:

The SEC will not object to the filing of a registration statement for a private equity line financing prior to the issuance of securities by the company under the equity line even when there are contingencies attached to the investor’s obligation to accept a put of shares from the company, as long as the above conditions are satisfied and the following terms of the investment have been agreed upon by both parties and disclosed by the company at the time that the resale registration statement is filed:

A private equity line facility is similar to a PIPE transaction except that it features multiple delayed draw downs instead of a one-time sale to the investor.

See Comparative Analysis of Methods of Accessing the Equity Capital Markets: Chart for an overview of the different methods a company can use to access the equity capital markets.