IGTA Journal - Summer 2018

financial ratios has deteriorated as a result of an industrial incident) and to the absence of a mass of creditors, painful and time consuming when the contract needs to be adjusted. Some of these disadvantages can be partly circumvented. Philippe Willion, Tarkett's group treasurer, who issued two German private placements, cautiously opted for "the crumbling of the tickets": in the event that some investors refuse to arrange the contract, they would be reimbursed rubies on the nail, a non-drawn bank line serving as a safety valve if necessary. One of his colleagues, on the other hand, limited the number of banks present at his Schuldschein to less than fifteen (part of the remuneration of arranging banks depended on it), in order to facilitate the contacts in case of glitch. Same line of flight Moreover, if they each have their identity, the three main private placements, which are not static, tend to converge. For example, US investors have reacted to the rise of the Euro PP by bearing the risk of making euro funds available to issuers. The standard Schuldschein contract, appreciated for its simplicity, is starting to get heavier, especially because of the increased presence of foreign investors (Asian, Indian banks ...). "In terms of covenants, the three markets are now close," says Christophe Liaudon, the group treasurer of Neopost, an SBF 120 company that borrowed in all three formats. The Euro PP, for its part, moves away with little touches of what was the European private placement. "In 2016 and 2017, in particular, the contracts have increasingly aligned with banking practices, including the multiplication of supervision clauses," notes Anne-Lise Allard, Head of Corporate Private Debt at La Banque Postale Asset Management, a pioneering company for private placements. This specialist also explains that her team, and more generally LBPAM, have the means to follow these clauses and to renegotiate them if necessary. Shared qualities Above all, these three devices respond in a manner roughly equivalent to the aspirations of companies seeking funding. They remain primarily OTC markets where the parties are free to arrange their relationship as they wish (several maturities, several currencies, postponed departure, redemption ...), often in complete confidentiality. They are, to a certain extent, insensitive to the turmoils that are falling on the financial markets, which help companies to keep them for the rainy days, and issuers find there also more stable prices. Private placements also allow - this is a recurring motivation - to escape exclusive head-to-head with its banks and, for companies operating in the mass markets, to reach other investors and maintaining direct links with them. Other arguments shared: longer maturities than those in the bank credit, and less expensive fees than those of a public issue. Finally, the implementation is rather simple for companies that, for example because their securities are listed on a regulated market, are used to communicating. "It's just if we did not set the price IGTA eJournal | Summer 2018 | 8