Last year witnessed a record-breaking number of international borrowers tapping the private placement market. A combination of historically low interest rates, strong investor demand and public market volatility has made private placement increasingly the product of choice for many borrowers.
A debt private placement is a bond which is exempt from registration with the Securities and Exchange Commission (SEC) and is not listed with any other regulatory authority or exchange. These bonds are issued by borrowers from many countries around the globe and are sold to sophisticated institutional investors in multiple jurisdictions. Approximately 90% of the available funds in the marketplace, however, come from US insurance companies and pension funds, and as such, transactions are generally structured to meet US Securities Act exemption provisions.
