Private placements act as a hybrid between a public bond and a syndicated loan. They are not regulated by the SEC and public disclosures are not required. Debtors are willing to pay a higher interest rate in order to maintain confidentiality and work with a sophisticated, smaller group of investors.
Key learning objectives:
Understand what a private placement is
Explain the key differences between a private placement and other securities
Describe the unique benefits of a private placement