The Law Dictionary

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DIRECT PLACEMENT Definition & Legal Meaning

Definition & Citations:

The placement of a NEW ISSUE of securities by a company directly with an institutional investor, without the use of a financial intermediary. A direct placement, which can theoretically involve any type of security but in practice tends to involve DEBT issues, serves as an example of DISINTERMEDIATION. In general, only the largest companies directly place their securities, as the process requires name recognition and strong financial standing in order to attract a suitable base of investors. See also DIRECT PUBLIC OFFERING.

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