RT Journal Article
SR Electronic
T1 Investment-Grade Private Placement Loan Spreads
JF The Journal of Fixed Income
FD Institutional Investor Journals
SP 19
OP 34
DO 10.3905/jfi.1999.319225
VO 9
IS 3
A1 Randolph L. Hood
YR 1999
UL https://pm-research.com/content/9/3/19.abstract
AB The private placement of securities by insurance companies represents a large but relatively unexplored category of investing. The author examines a sample of insurance company investment-grade-fixed-income private placements as reported to the American Council of Life Insurance for 1995 through 1998. The $97 billion in investments is similar to the public investment grade fixed-income market in terms of spread, but differs in a few special respects. Private spreads appear to track public spreads, but with a slight lag, perhaps because of institutional factors or pricing conventions. The spreads on investment -grade private placements are wider than those available in the public market. The wider spread is apparently due in part to extra monitoring costs and perhaps illiquidity.