CURRENT AFFAIRS

Detailed explanation-1: -Indian companies’ fundraising through private placement of bonds more than doubled on-month in November, data from the country’s capital markets regulator showed.

Detailed explanation-2: -Private placement bonds are unregistered debt securities that are sold to accredited investors via investment banks. Typical use of proceeds is similar to those of public bonds: refinancing debt, expansion, acquisitions, dividends, and stock buyback and recapitalization programs.

Detailed explanation-3: -Key Takeaways An IPO is underwritten by investment banks, which then make the securities available for sale on the open market. Private placement offerings are securities released for sale only to accredited investors such as investment banks, pensions, or mutual funds.

Detailed explanation-4: -What Is It? A private placement is an offering of unregistered securities to a limited pool of investors. In a private placement, a company sells shares of stock in the company or other interest in the company, such as warrants or bonds, in exchange for cash.

Detailed explanation-5: -Debt issued via a private placement does not require a public credit rating. However, the National Association of Insurance Commissioners (NAIC) assigns a private credit designation, if the private placement instrument is held by an insurance company.