Private placement


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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 ?
ENPNewswire-August 23, 2019--Galantas Closes GBP GBP1,000,000 Private Placement
(CSE: SHP) today announced the closing of the Company's previously announced (August 1, 2019) non-brokered Private Placement. A total of 14,831,250 units were placed for total gross proceeds of $1,186,500.
Servier, an independent international pharmaceutical group, is announcing that it has successfully made an inaugural private placement for 405 million dollars on the US private placement (USPP) market, in four tranches with maturities of 7, 10, 12, and 15 years.
Ziopharm Oncology announced that it has entered into an agreement with existing investors for the exercise of previously issued warrants to purchase common stock in a private placement that is expected to result in gross proceeds to Ziopharm of approximately $45M, before deducting placement agent and other offering expenses.
(TSX:NCP) ("Nickel Creek" or the "Company") is pleased to announce that it has closed Tranche 1 of its previously announced private placement (the "Private Placement") pursuant to which the Company issued a total of 23,139,092 units ("Units") for gross proceeds to the Company of approximately $949 thousand.
Acasta Enterprises Inc (TSX:AEF) closed a private placement (the subsequent private placement) of 2,166,017 of its class B chares at CAD0.68 per share and raised total gross proceeds of CAD1.5m.
Global Banking News-July 1, 2019-Acasta completes subsequent private placement of 2.2m class B shares at CAD0.68 per share to raise CAD1.5m in gross proceeds
International Resource News-March 20, 2019--Solaris Copper completed CAD3.9m non-brokered private placement financing
The PSE approved the said private placement of 1.42 billion shares also worth P1.42 billion on June 27.
According to the company, it has raised USD2.50m from the first tranche of an on-going private placement, about USD1.80m from the second tranche of private placement as well as a mandatory conversion of 8% senior notes of USD2.58m from the the third tranche.
NORDIC BUSINESS REPORT-May 31, 2016-Axactor registers increase in share capital related to private placement of 220,400,000 new shares
Islamabad -- The Securities and Exchange Commission of Pakistan (SECP) with the approval of the federal government has notified the draft Private Placement of Securities Rules, 2016, and has placed them on its website for public comments within 30 days.

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