IGTA Journal - Summer 2018

on the phone," recalls the treasurer of a CAC 40 company about a Euro PP that went like an easy ride In these conditions, we understand that for a company looking for non-bank financing, the prerequisite for any operation is to identify its priorities: price, applicable law, duration, simplicity of the contract, fixed or variable rates, etc. "The head of financing must first of all define his needs and establish the list of points on which he cannot compromise," advises Christophe Liaudon, who speaks of experience. To avoid making a decision that could be biased and to open the firing angle as much as possible, one of his colleagues asked all his banks to come and present Euro PP, Schuldschein and US PP, in a parade that lasted two full days. "With regard to private placements, I am also working hard on the AFTE network. It's a mine of information, "says this professional whose company has used the Euro PP and Schuldschein. Once funding granted, monitoring starts: are the clauses respected? Is the business plan likely to evolve? This "after-sales service" is all the more important as the financing is long-range and ultimately repayable. Although it is difficult to establish generalities in this area, it does not have the same intensity depending on whether one is dealing with one or the other of the private placements. The Schuldschein, where syndications are often overcrowded, is probably the device where investors are less present. "We were not surprised by the demands of the banks, many of them European, when preparing for the operation. We also told them that there was no question of giving them side business. On the other hand, since the conclusion of the operation, very few of them participate in the conferences that we organize ", testifies the director of the financing of a company of the SBF 120. The American investors seem to be more present, but without excess zealous, perhaps because debtors are well known companies with good credit quality. In the case of the Euro PP, on the other hand, the monitoring is very often described as "very important" by investors, who turn to companies of modest size. "We have at our disposal a whole series of information channels, including financial news agencies, newspapers, etc., because monitoring is essential. However, it is very rare that we learn bad news by a voice other than that of the issuer because of the proximity we have with him, "says Anne-Lise Allard, La Banque Postale Asset Management. Is communication more difficult with smaller companies, for whom private placement is the first incursion out of banking credit? This is not the opinion of Hervé Goigoux-Becker, Investment Director at Zencap, an OFI subsidiary management company that has completed some 40 private placements: "We do not encounter any particular problem with SMEs’ bosses. The messages go well and the communication is less formatted and corseted than what it can be in companies accustomed with relations with the financial sphere”. Responsible for English translation AFTE, the French IGTA Member Association. Translator: Richard Cordero IGTA eJournal | Summer 2018 | 9