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The Euro PP Market: A New Source of Funding in a Disintermediation Context

Stéphanie Collet ESCP Europe, université Libre de Bruxelles. Contact : scollet@ulb.ac.be.
Caroline Peny ESCP Europe. Contact : caroline.peny@gmail.com.


Private Placements offer an alternative way of funding, especially for SME firms. This paper explains the circumstances under which the Euro PP (Private Placements) market has seen an increasing amount of transactions in France in the last few years. Based on the analysis of transactions between July 2012 and July 2015, this article describes the situation of the Euro PP market. It has seen a rising issuance volume of non-listed and small companies as well as longer maturities, attracting investors searching for a higher return. This paper puts forward that Euro PP require less covenants and that investors appear to select investments according to the characteristics of the issuer such as its credit quality, rather than according on the economy context.


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