Product overview
OverviewThe term private placement can refer to a number of different instruments in different markets, however, we define a private placement as an unlisted capital market debt instrument, which usually has a fixed rate of interest and is for a fixed period, lent to companies by institutional investors such as pension funds and insurance companies. By their nature private placements tend to be illiquid, promoting a longer term relationship between issuer and investor, although private placements typically contain covenants to provide additional comfort to investors. For issuers there is no requirement to obtain a rating from the agencies to access this market although this does not preclude rated issuers from accessing the market.
As the market has grown, documentation has become more standardised, with market participants joining together to draw up the Model Form Note Purchase Agreement, which has become the benchmark for the private placement market. This has greatly improved the documentation process making it quicker, easier and more consistent for all participants. Nevertheless, the documentation remains flexible enough to take account of individual issuer requirements and specific investor concerns.
If you are a potential issuer, investor or would just like to understand more about private placements please contact us.