Legal Definitions - direct placement

Direct placement refers to the sale of an entire issue of securities by a company, such as an industrial or utility company, directly to a lender or group of investors, instead of going through an underwriter. This type of offering is exempt from SEC filing requirements.

For example, if a utility company wants to raise funds by issuing bonds, it may choose to sell the entire issue of bonds directly to an insurance company or a group of investors, without involving an underwriter.

Direct placement is also known as private placement.

Overall, direct placement allows companies to raise funds without having to go through the lengthy and expensive process of working with an underwriter. It also provides more control over the terms of the offering and can be a faster way to raise capital.