Standby agreement

(redirected from Stand-By Agreement)

Standby agreement

In a rights issue, agreement that the underwriter will purchase any stock not purchased by investors.

Standby Agreement

An agreement between the issuer of a security and its underwriters stating that the underwriters are responsible for any unsold portion of the issue. That is, the underwriters agree to buy the remainder of a new issue if they are unable to place its entirety with investors. This transfers the risk of the unsold portion of the issue from the issuer to the underwriters. This guarantees that the issuer will raise the capital it intends to raise, but leaves the underwriters with the possibility that they must purchase an issue with low value. As a result, underwriters charge a standby fee for a standby agreement. It is also called firm commitment underwriting or a backstopped deal.
References in periodicals archive ?
By virtue of this stand-by agreement Tunisia obtained a 1.
The International Monetary Fund cleared the way for roughly $51m in aid to Bosnia on Monday as part of a Stand-By Agreement conceived in September 2012, after the organization found that the Balkan nation was keeping its finances in check, Reuters reported.
KAHyRE (CyHAN)- The Egyptian government and the IMF will enter new negotiations over a Stand-By Agreement to lend Egypt some $4.
This is the fifth tranche of the loan approved by the IMF for Pakistan under a Stand-By Agreement in November 2008 when Pakistan faced a balance of payments crisis.
The debt payment was a requirement of the IMF that had delayed signing the stand-by agreement for this quarter awaiting the cancellation of the debt.
Zachau said a new stand-by agreement with IMF could bring external financing and lower the government's dependence domestic borrowing.
ISLAMABAD, January 03, 2010 (Balochistan Times): The State Bank of Pakistan (SBP) has achieved the targets, prescribed by the International Monetary Fund (IMF) in the Stand-by Agreement.
3 billion as the amount under that stand-by agreement,' IMF Director for Africa, Antoinette Sayeh, told reporters at World Bank and IMF meetings in Istanbul.
With this package, the Caribbean country's government met the quantitative goals established by the stand-by agreement signed in January 2005 with the IMF, effectively allowing growth of the gross domestic product at 3.
QUITO -- The IMF agreed to extend its stand-by agreement with Ecuador until June, giving the country one more opportunity to pass a difficult tax increase.
While the IMF played a belatedly prominent role in Algeria's reforms, the Algerian government was careful to stay ahead of the IMF in proposing reforms so that it would not be forced into another stand-by agreement that would allow greater intervention by the international community.
The World Bank loan is the latest in a series of international agreements, including a stand-by agreement with the International Monetary Fund for $725 million, which will strengthen Romania's macroeconomic stability and development, as well as encourage foreign investment, privatization and business expansion.