underwriter

Underwriter

A company or other entity that administers the public issuance and distribution of securities from a corporation or other issuing body. An underwriter works closely with the issuing body to determine the offering price of the securities, buys them from the issuer and sells them to investors via the underwriter's distribution network.

Notes:

Underwriters generally receive underwriting fees from their issuing clients, but they also usually earn profits when selling the underwritten shares to investors. However, underwriters assume the responsibility of distributing a securities issue to the public. If they can't sell all of the securities at the specified offering price, they may be forced to sell the securities for less than they paid for them, or retain the securities themselves.

See also: Eating Stock, IPO, Issuer, Prospectus, Red Herring, Underwriting

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Underwriter

A firm, usually an investment bank, that buys an issue of securities from a company and resells it to investors. In general, a party that guarantees the proceeds to the firm from a security sale, thereby in effect taking ownership of the securities.

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underwriter

An investment banker that acts to guarantee the sale of a new securities issue by purchasing the securities for resale to the public. Also called sponsor. See also agreement among underwriters, investment banker, lead underwriter.