Private placement financing is a debt or capital lease obligation arranged between a municipality or a 501(c) (3) not-for-profit organization and a single sophisticated institutional investor. The investor can be a bank, insurance company, finance company, hedge fund, or high-net worth individual. Private placement financing is similar to municipal bonds and notes because it is used to finance a public agency's capital equipment, real property, infrastructure, technology, and working capital needs. Private placement obligations offer an efficient solution for borrowers who want additional payment and prepayment flexibility and a quick funding solution, and who will accept a slightly higher rate. Traditional municipal bonds allow borrowers access to the capital markets for small and large transactions with extended financing terms, and some prepayment restrictions, in exchange for a slightly lower rate. (Contains 1 table.)