The private placement of debt securities, compared to the more common public issuances, has grown in popularity in recent years, particularly in emerging markets such as those in the Middle East. Whilst there is little publicly available data on the volume of such issuances, they have certainly been on the rise. Numerous issuers have opted to issue on a private placement basis rather than, or in addition to, a public offering, particularly against a backdrop of reduced bank liquidity in most emerging markets, and particularly in the Middle East. We have considered some of the key factors that have recently contributed and influenced the growth of private placement issuances.

PRIVATE PLACEMENT – DEFINED

In a typical public issuance of debt securities, the issuer markets the issue widely, either on a retail basis or to institutional investors only. Following the offering, the securities are typically admitted to listing and trading on a particular stock exchange. In contrast, in the private placement context, an issuer markets its debt instruments to a small pool of investors only, with no subsequent listing of the securities on a stock exchange.