A private placement is a debt security that is exempt from registration with the Securities and Exchange Commission (SEC) under Regulation D of the Securities Act of 1933. Privately placed debt encompasses a wide variety of fixed income investments including corporate obligations, real estate related, project finance and asset-backed loans for midsize to large companies. It is a large market, with more than $30 billion of investment grade debt issued annually.
Privately placed debt provides an enhanced yield over comparably rated public securities as well as access to issuers that are not available in the public market. The yield advantage of private placement bonds generally equates to an increased spread of 10–50 basis points, along with more restrictive covenants or security than comparably rated public securities. The different issuers also provide some issuer and geographic diversification to the overall portfolio.
We offer several advantages in the management of private placement securities:
- To reduce the appearance of any conflict of interest and to promote our fiduciary obligation to protect our clients’ interests, AAM only allocates private placement investments to client accounts. AAM does not maintain or allocate private placements to proprietary “house” accounts. Private placement investments are based solely on clients’ goals and needs.
- The collective buying power of our insurance clients enables us to access this market effectively.
- Our experienced team of credit research professionals has an average of 18 years of experience in the sector.