Roundtable: Stable US PP market holds its own by being flexible

As Europe moves to develop its own private placement markets, the model for these efforts is the US PP market. For several decades, a committed investor base of US insurance companies have been buying private investment grade bonds, and for the last 20 years, many of those have come from European issuers. Through turbulence in other financial markets, this channel of funding has kept flowing, as the investors take a long view on credit and are less prone to get the jitters if markets sell off. But beneath the surface, the market is changing. Investors know they need to keep competing for deals with other sources of funding, including a vastly increased European public corporate bond market, and now European PPs. To do this, they are offering very flexible terms to issuers — and keen pricing. GlobalCapital gathered a group of leading investors, issuers and investment bankers in the market in London to discuss its progress and how the market is responding to changing conditions. The panel ended by debating whether the US PP documentation could be used as a model for European deals.