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Overview
What is a Private Placement?
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 for companies raise capital, versus selling a publicly offered security or establishing a traditional credit arrangement with a bank.
Three key features classify private placement securities:
- The securities are not publicly offered
- The securities are not required to be registered with the Securities and Exchange Commission (SEC)
- The investors are limited in number and are “accredited”
Who Can Issue a Private Placement?
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 businesses in a similar fashion as banks, with a “buy-and-hold” approach, and with no required trading or public disclosures.
Who We Work With
Related Insights
Understanding Private Placements
Typical financing sizes include:
- Senior debt: $10 million to $300+ million
- Subordinated debt: $10 million to $100+ million
- Preferred equity: $10 million to $50+ million
Companies can use private placements to finance acquisitions, support growth initiatives, refinance and/or diversify existing debt, or pursue other strategic objectives.
Collapse SectionPrivate placements can be structured as senior debt, subordinated debt, or a combination of both. Financing may include cash coupon payments and deferred interest, with maturities ranging from 3 to 30+ years. Companies can also choose from flexible repayment options, including amortizing or bullet structures, as well as fixed-rate or floating-rate pricing.
Collapse SectionCompanies choose PGIM for private placement financing because of our relationship-focused approach, comprehensive evaluation process, and ability to support financing needs across global markets and currencies. We take a holistic approach to understanding each business and its objectives, allowing us to structure financing solutions that align with companies’ long-term goals.
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