Loans gain favor in private placement deals, syndicate banker says

By Paul A. Harris

Portland, Ore., Sept. 13 - Investors who play the private placement market lately have been favoring loan structures over bonds, a syndicate banker said on Tuesday.

"People are more focused on unrated senior secured credit facilities because buyers lately seem to be dominated [by] structured debt investors," the banker said.

"We're seeing more loans than bonds."

The private placement market has been fairly busy recently, the banker said, adding that there have been a couple of new issues recently.

"It was a quiet summer," the sellsider remarked.

"The global uncertainty took its toll. People are walking, not running, toward transactions."

However, private placement investors, particularly hedge funds, remain eager to lend into senior secured transactions that feature double-digit coupons, the source said.

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