Standby Underwriter

(redirected from Stand-By Underwriter)

Standby Underwriter

An underwriter who agrees with the issuer of a security and its underwriters to be responsible for any unsold portion of the issue. That is, the underwriter agrees to buy the remainder of a new issue if it is unable to place its entirety with investors. This transfers the risk of the unsold portion of the issue from the issuer to the underwriter. This guarantees that the issuer will raise the capital it intends to raise, but leaves the underwriter with the possibility that it must purchase an issue with low value. As a result, standby underwriters charge a standby fee.
References in periodicals archive ?
NYSE: WAL) announced today that a stand-by underwriter has been retained for the Company's planned rights offering, which was announced on September 18, 1997.
As stand-by underwriter for the rights offering, Wexford has agreed to purchase at the rights offering price the shares of common stock, if any, that are not purchased in the rights offering.
Legg Mason served as financial advisor and stand-by underwriter to ABCI in connection with both its creation upon the mutual to stock conversion of Summit Savings Banks, SSB in 1992 and ABCI's conversion/acquisition of Peoples Savings Bank, SSB in 1994.
and the other members of the syndicate of stand-by underwriters have undertaken to subscribe to all the shares that may remain unsubscribed to at the end of the offer period on the stock market; such undertaking does not include those shares that World Motors S.
As previously communicated on March 1st, 2006, the Company has signed a preliminary contract with UniCredit Banca Mobiliare to establish a syndicate of stand-by underwriters relating to the above-mentioned capital increase.
Ducati and UBM Sign Preliminary Contract to Establish Syndicate of Stand-By Underwriters for Proposed Capital Increase
UBM will also promote and set up a syndicate of stand-by underwriters who will subscribe to any shares that may remain unsubscribed to at the conclusion of the transaction.