Private placement

(redirected from Direct Placements)

Private placement

The sale of a bond or other security directly to a limited number of investors. For example, sale of stocks, bonds, or other investments directly to an institutional investor like an insurance company, avoiding the need for SEC registration if the securities are purchased for investment as opposed to resale. Antithesis of public offering.

Private Placement

The sale of a new issue to a few large institutional investors without registering with the SEC. A private placement is exempt from SEC registration, subject to certain restrictions, because it is not offered to the general public. In order to make a private placement, the issuer must file a private placement memorandum (PPM), which explains exactly why the issue complies with SEC Regulation D exempting certain companies from registration; this is done to protect both the issuer and the investors. According to Regulation D, a PPM must contain a complete description of the security and the terms of the sale. It must also include applicable information about the issuer's financial situation and applicable risk factors. Private placement is also called direct placement.

private placement

The sale of an issue of debt or equity securities to a single buyer or to a limited number of buyers without a public offering. The placement is generally conducted by an investment banker who acts as an agent in bringing together the seller and the buyer(s).
Case Study For companies needing investment capital, private placements often save time and fees compared to public offerings. In early 2000 Healtheon/WebMD Corporation issued $930 million of new stock directly to the Janus funds. From Healtheon's standpoint, the issue was taken care of quickly without the need to pay a hefty fee to the firm's investment banker, Morgan Stanley Dean Witter (now Morgan Stanley). From Janus's standpoint, the firm was able to obtain a small discount on a sizeable block of stock it wanted to buy. In addition, Janus wasn't required to take a chance on bidding up the price of Healtheon stock by buying shares in the open market. Shares included in the private placement increased Janus's stake in Healtheon from 3% to 12%, a relatively large position for a mutual fund.

Private placement.

If securities are sold directly to an institutional investor, such as a corporation or bank, the transaction is called a private placement.

Unlike a public offering, a private placement does not have to be registered with the Securities and Exchange Commission (SEC), provided the securities are bought for investment and not for resale.

References in periodicals archive ?
Overall we anticipate that revenues for the full year will show modest growth with pre-exceptional profit in line with the prior financial year and that our second-half net direct placements will pick up materially over the first half.
Through custom travel, direct placements and local contracts, the Prime HealthCare Staffing team is committed to delivering quality rehabilitative care to each patient, upholding the same commitment to patient care as shared by the nation's leading healthcare facilities and therapists.
Berger joins the firm as Principal in charge of direct placements and leads a team of finance professionals providing a comprehensive range of private placement and direct investment activities.
The unit helps all age groups with assisted and direct placements designed to enhance the transition from benefit dependency to full time employment.
Because industrial insured exemptions are complete exemptions to the doing-business laws, certain in-state activities by insurers that are prohibited in direct placements are permissible under industrial insured placements.
The direct placements are expected to have eight and 10 year terms.
Since 2002, the team at Tortoise Capital Advisors has participated in over 65 direct placements, private company investments and initial public offerings totaling more than $1 billion.
Flexible provides temporary and direct placements in the light industrial, clerical, professional, and technical industries.
8 billion, or 73%, was in direct placements and publicly traded bonds, and $2.
The wide dispersion of vouchers, the creation of stock markets and the possibility for direct placements combine to create a unique opportunity for experienced investors.
Upon his promotion to investment manager, he headed a team which negotiated direct placements in all sectors of the economy.
Approximately 51 percent of total assets were invested in direct placements or IPOs of MLPs or affiliates.