What is a private placement bond What is the target of private placement

The question of what is a private placement bond is believed to be something that investors who have just come into contact with the bond want to know. Then I will introduce the private placement bond related knowledge in detail for novice investors.

Private placement bonds

Bonds are classified according to the way they are issued, and can be divided into public and private placement bonds. Private placement bonds are bonds raised to a small number of investors who have a specific relationship with the issuer, and their issuance and transfer have certain limitations. The procedures for issuing private placement bonds are simple and generally cannot be traded on the securities market. The distinction between public and private bonds in the European market is not obvious, but in the US and Japanese bond markets, this distinction is very strict and very important.

Private placement bonds

The issuance of private placement bonds has certain restrictions compared to public offerings. The target of the private placement is a limited number of professional investment institutions, such as banks, trust companies, insurance companies and various foundations. The securities regulatory agencies of the countries where the general issuance market does not specify the number of private placement targets, but in Japan, it does not exceed 50. These professional investment institutions generally have experienced experts and can fully investigate and research bonds and their issuers. In addition, issuers and investors are more familiar with each other, so there is no requirement for public display, that is, the private placement is not Adopt a public system. The purpose of buying private placement bonds is generally not to change hands, but to retain them as financial assets. Japan has certain regulations on the resale of private placement bonds, that is, it cannot be transferred within two years after issuance, and even if it is transferred, it is limited to transfer to investors in the same industry.

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