Navigating the market guide to pan-European private placements

What is the pan-European private placement market?

A private placement is a medium or long term, generally unlisted, debt financing between a listed or unlisted company and a small number of institutional investors. It may take the form of a loan or a note. The US private placement is a well-developed market. The European market by comparison has pockets of notable activity, in particular in Germany and France, but has remained fragmented.

It is envisaged that the development of a more unified European private placement market will be of particular benefit to medium-sized and unrated European companies by providing medium to long term debt funding which may not otherwise be available to them from the loan or bond markets. It will also be able to accommodate larger corporate issuers.

The development of the market is aligned with the European Commission’s policy objective of bringing about a Capital Markets Union.

What is the aim of the guide?

The guide is intended to provide a voluntary framework for common market standards and best practices in pan-European private placement (PEPP) transactions. In so doing, it aims to strengthen the identity and recognition of the market.

What does the guide cover?

The guide, among other things:

• explains the objectives for the development of the PEPP market, and the key PEPP market characteristics

• summarises the main parties to a PEPP transaction and their respective roles and responsibilities at various stages of the transaction

• gives an overview of key documentation and conditions precedent, and includes an information memorandum template and form of non-disclosure agreement

• includes an illustrative transaction timetable

• provides standard summary terms, and description of key points, for discussion between borrowers and investors (that aims to be both documentation and jurisdiction neutral), and

• promotes and directs readers to the standardised and complementary transaction documentation recently published by the LMA and the Euro PP Working Group

The guide will be update and supplemented as the market develops.

Further reading

For more on the development of a pan-European private placement market, and non-bank lending options for corporates generally, see: Non-bank lending options for UK corporates—two years after Breedon and The UK private placement market—starting 2015 on a high note.

Interviewed by Miranda Campbell.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

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