What is a Direct Issuer?

Direct issuance refers to the way in which the issuer unilaterally determines the conditions for the issuance of treasury bonds and then directly sells the treasury bonds to investors through various channels (such as the counters of banks and securities companies). Issuing Treasury bonds in this way takes a long time, costs are high, and the degree of marketization is low. Therefore, in countries with developed government bond markets, this method is basically eliminated, and only a few countries are used to issue unlisted circulating government bonds for individual investors. ^[1]

Direct distribution

Right!

Direct issuance refers to the way in which the issuer unilaterally determines the conditions for the issuance of treasury bonds and then directly sells the treasury bonds to investors through various channels (such as the counters of banks and securities companies). Issuing Treasury bonds in this way takes a long time, costs are high, and the degree of marketization is low. Therefore, in countries with developed government bond markets, this method is basically eliminated, and only a few countries are used to issue unlisted circulating government bonds for individual investors. ^[1]

Chinese name

Direct distribution

Meaning

Refers to the securities issuer's own performance of securities

Nature

Method for issuing securities

Features

Simple and convenient, low distribution costs

Direct distribution

Is the earliest method of bond issuance, its characteristics are simple and convenient, low issuance costs, and issuance procedures

Related books

Directly between the issuer and the investor, reducing intermediate links. Generally speaking, direct issuance is mainly suitable for two situations: Issuance of private placement bonds. Issuance of bonds to specific investors. Its scope of issuance is small and its circulation is small. Generally, no intermediary agency is required to handle issuance affairs. Issuance of financial bonds. Financial institutions generally issue direct bonds. Because financial institutions have good conditions for selling bonds themselves, they do not have to entrust other intermediaries.

The disadvantage of direct issuance is mainly that the issue objects are often limited to specific investors, making it difficult to raise the planned amount of securities. In addition, direct issuance does not have the assistance of intermediaries such as financial institutions, and lacks the power to fully mobilize social idle funds. Therefore, indirect issuance is often adopted for a large number of securities.