Getting Down To Brass Tacks...

January 30, 2009

With the holidays long gone and the annual conference wrapped-up, the U.S. private placement market was finally free to get down to business last week, and it did just that. There were new deals in the market, and talk of upcoming pricings, as well as, unfortunately, talk of more personnel cuts.

As one private placement agent put it, “there isn’t a crush of new deals out there right now, but at least there are deals.” On the back of a few strong weeks in the public market --- off of which the private market sets its pricing levels --- a number of deals have launched over the past few weeks, or this past week, and are set to price-up very soon.

From the energy sector there are offerings from Houston-based Ultra Petroleum, a repeat issuer, El Paso Corp.’s liquefied natural gas subsidiary Southern LNG, and Pennsylvania-based electric utility Duquesne Light.

On the international front, global food and food products company Associated British Foods plc is also looking to get private funds, and Australia-based cable TV company FoxTel recently did a pre-deal roadshow, but has yet to issue.

Talk also swirled last week about personnel cuts related to the Bank of America-Merrill Lynch takeover, and it was said the BofA cut two more staff members from its Chicago-based private placement group, and one from its London-based group. Allstate has also reportedly made cuts to some of its private placement personnel.

With a handful of live deals floating around in the private placement market, and a strong public market to back it up, it seems like things are finally getting started in 2009. In the overall markets, the year has opened with just about as grim an outlook as any year in recent memory, and maybe in a generation. But if the overall sentiment at the conference is to be believed, the private placement market can and will find ways to keep issuance strong this year. And given the way the fourth quarter of 2008 finished-up, most agree: things could be starting-off a lot worse than they are now.

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