US Private Placements – Enhancing Yield Within Investment Grade Fixed Income

Charles Dudley, Head of Private Credit US, Allianz Global Investors

As US insurers continue to search for yield beyond investment grade corporate bonds, the US private placement market (“USPP market”) can offer insurers both yield enhancement and structural benefits when compared to public investment grade corporate bonds. In this session, we will discuss the USPP market and highlight that although the USPP market may be less well known than traditional investment grade fixed income, the market for these privately issued bonds is deep and has been in existence for over 30 years, with both large-cap issuers participating in the space, as well as familiar organizations like the MLB and NBA. Finally, we will discuss three of the primary benefits of investing in US Private Placements when compared to public debt: additional yield and total return, increased covenants and protection, and lower realized credit losses in the event of a default.

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