Private placement of debt securities occurs more frequently in:

Question

Quizplus · Accepted Answer

Private placement of debt securities is more commonly used by smaller-sized firms because they may not have access to public debt markets, and therefore have to seek funding from private investors. Private placement allows these firms to borrow from a select group of investors who are willing to buy the debt securities. Larger-sized firms usually have the ability to raise funds through public debt offerings, and may not need to rely on private placement. The use of venture capitalists and the combination with convertible bonds may be factors in private placement, but they are not as relevant as the size of the firm.

Private Placement of Debt Securities Occurs More Frequently In