Private Placement​ Debt

A private placement is the private sale or “issue” of corporate debt or equity securities by a company or “issuer” to a select number of investors. It is another way that you can raise capital, versus selling a publicly offered security or establishing a traditional bank credit arrangement.

Three key features classify private placement securities:​

1. The securities are not publicly offered​
2. The securities are not required to be registered with the Securities and Exchange Commission (SEC)
3. ​The investors are limited in number and are “accredited”

Private Placement Examples

Traditionally, middle-market companies like yours have issued debt in the private placement market directly with a private placement investor. Examples of private placement investors include  large insurance companies, other institutional investors, or through agents (often an investment bank), who then solicit bids from several potential investors. Larger transactions ($100 million+) are typically done with an agent. It’s possible for there to be as few as one investor for any issue. A private placement issuance is a way for institutional investors to lend to you in a similar fashion as banks, with a “buy-and-hold” approach, and with no required trading or public disclosures.