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Back Stop

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Back Stop
The act of providing last-resort support or security in a securities offering for the unsubscribed portion of shares. A company will try and raise capital through an issuance and to guarantee the amount received through the issue, the company will get a back stop from an underwriter or major shareholder to buy any of the unsubscribed shares.

Notes:
For example, in a rights offering you might hear "ABC Company will provide a 100% back stop of up to $100 million for any un-subscribed portion of the XYZ Company rights offering." If XYZ is trying to raise $200 million but only raises $100 million through investors then ABC Company will purchase the remainder.


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Weaver (2-0) struck out the first 10 batter of the game, including four in the third inning when Baron Frost reached on a third strike that went to the back stop.
Esmark further indicated that Esmark and Franklin Mutual Advisers were prepared to allow Wheeling-Pitt to provide interested shareholders of Wheeling-Pitt and other strategic partners with the opportunity to participate as standby purchasers of a portion of the rights offering with Franklin Mutual Advisers, who would reserve the right to back stop a minimum amount of at least $50 million.
Because the 15,885,662 shares were fully subscribed for by the public, M&F was not required, pursuant to its agreement to back stop the rights offering, to purchase any shares in excess of its pro-rata portion.
 
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