Private placements offer a major capital source with relatively competitive pricing. Andrew Moorfield of bfinance.co.uk provides some background.
A private placement is a debt capital market transaction that generally has covenant features similar to a bank loan and is often used as an alternative to bank funding. Unlike a traditional public debt market transaction which is distributed to a wide range of investors and can trade in an active secondary market, a private placement is not actively traded. Typically a private placement is marketed to a much smaller number of long-term ‘buy and hold’ investors, with the deal eventually being distributed to between 6-12 interested parties.
