AFP2012: Demystifying the Private Placement Debt Market

The title of this session is definitely no accident.

The private placement debt market is a financing option for issuers who do not have access to, or choose not to, access the public debt markets for reasons including:

  • Size bias.
  • Ratings requirements.
  • Issuance costs.
  • The public market’s lack of flexibility in tenor, currency and structure.

There are approximately 200 issues each year that produce US$40bn to US$50bn of liquidity to public and private corporates of varying sizes.

This is a market where issuers can look to negotiate to tailor structures that match their liquidity needs. Issue sizes range from US$50m to over US$1bn. Tenors can range from three to 30 years. It is predominantly a US dollar market, but issuances can be achieved in all major currencies.

Although the energy and power industry is traditionally the largest issuer, there is broad participation in this market across other industry sectors. Those who issue in this market generally return to it for new liquidity needs.

However, the market sees very few new issuers each year. Is that due to lack of interest in this particular market? Or is it more a lack of understanding?

In this session at the AFP Annual Conference, Ferdinand Jahnel of Henry Schein and Mike Connolly, certified treasury professional (CTP), of Tiffany & Co will share their respective experiences of issuing private placement debt. They will be joined by Van Thorne and Rick Fischer of MetLife Investments, who will provide an extensive description of the characteristics of this market and how to use it, as well as give insight of the motivations of the purchasers of this debt product.

See you there on Monday 15 October at 10:30-11.45am in room A204.



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Mark Carney Bank of England