Glossary
Euro PP
Euro Private Placement
A Euro PP is medium or long term financing that a company negotiates with a limited number of institutional investors, in the form of a bond or a loan.
Definition
A Euro PP (Euro Private Placement) is a medium or long term financing transaction between a company, listed or unlisted, and a limited number of institutional investors, in the form of a bond or a loan, on documentation negotiated between the parties. The market has existed since July 2012. The Euro PP Charter of October 2019 puts the amounts between around €10m and several hundred million euros, for borrower leverage below around 4x depending on the sector. Most transactions are repaid in a single payment at maturity (bullet). The debt ranks pari passu with the other senior creditors. France Épargne Corporate’s Issuing a Euro PP page describes the Euro PP formats and the cost benchmarks for these issues.
Worked example
A mid-sized company with €300m of revenue issues a €60m unlisted Euro PP bond over seven years, at a fixed rate and repayable at maturity. Three insurers and a private debt fund subscribe to it.
Points to check
- The format: listed bond, unlisted bond or loan.
- The borrower’s leverage, the Charter benchmark: below around 4x.
- The protective clauses: negative pledge, change of control, covenants, make-whole.
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