jointly and severally

Jointly and Severally

1. A legal term describing a partnership in which individual decisions are bound to all parties involved and thus undivided.

2. A term used in underwriting syndicates to refer to the distinct responsibility of individual companies to sell a certain portion of unsold new issue.

Notes:

1. When an investor authorizes power of attorney to two separate lawyers jointly and severally, both lawyers can make binding decisions without the approval of the other lawyer.

2. For example, an underwriter who has jointly and severally agreed to a 30% stake in the sale of a new issue must sell 30% of any remaining unsold portion, even if that underwriter has already sold more than this amount in the initial sale. All members of the syndicate are responsible for any leftover shares.

See also: Investment Bank, Initial Public Offering - IPO, Syndicate, Underwriting

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Jointly and severally

Municipal bond underwriting in which the account is undivided and syndicate members are responsible for unsold bonds in proportion to their participation, regardless of how many bonds they may have already sold. A firm with 20% of the account is responsible for selling 20% of the unsold bonds even if has already sold 25% of the total debt issue, for example. See: Severally but not jointly.

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jointly and severally

Of or relating to a securities offering in which the underwriter is responsible for its own allocation and for a proportionate share of any securities that remain unsold. Thus, a syndicate member allocated 10% of the securities to be sold would also be responsible for 10% of any unsold securities. Also called severally and jointly. Compare severally but not jointly.