During 2002, an increasing flow of international corporate borrowers rejected the public capital markets in favour of the lesser known private placement market. One of them was Scottish & Newcastle plc, which raised $850m over maturities as long as 12 years. Here, we will explore the market and explain why it has particular appeal to a broad range of corporate borrowers, including Scottish & Newcastle.
Although most commodity borrowers, including sovereigns and supranationals, continue to focus on the high-profile public Euromarkets, the volatile and sometimes uncertain reception offered to many corporate borrowers during the latter part of 2002 exemplifies why many have been prepared to look for alternative sources of capital and to redirect their attention towards the lesswell publicised, but perhaps more transparent and predictable, market of senior debt private placements.
