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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.


A company, usually an investment bank, that an issuer hires to place a new issue with investors. The issuer normally hires several underwriters for a single issue, where each is responsible for placing a certain amount of the new issue. The underwriters contact potential investors to gauge interest and sell the issue. Underwriters guarantee the price for a certain number of shares of the new issue. Because of their expertise on placing securities with investors, using underwriters often increases the chance that the placement will be successful. An underwriting firm is also called a house of issue. See also: Bracketing, Oversubscribed, Undersubscribed, Underwriting agreement.


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.


An underwriter, typically an investment banker, may buy an entire new securities issue from the company or government offering it and resell the issue as individual stocks or bonds to the public.

Or, in a best-efforts arrangement on a stock IPO, the underwriter may commit to selling as many shares as possible without actually buying the securities.

Part of the underwriter's job is to weigh the risks involved in taking on the financial responsibility of finding buyers against the profit to be made on the difference between the price paid for the issue and the profit it will generate.

Typically, a number of bankers join forces as a purchase group, or syndicate, to spread the risk around and to reach the widest possible market.

Insurance policies also need an underwriter. In this case, the term refers to a company that is willing to take the risk of insuring your life, property, income, or health in return for a premium, or payment.

References in periodicals archive ?
ISO HomeValue's latest release enables underwriters to invoke AIR's catastrophe models to generate a catastrophe risk analysis of the individual property at the point of underwriting.
Underwriters are strictly"numbers people"--they use a computerized database to make all of their initial assessments.
Underwriters often want to know the professional background of the audit committee member serving as the financial expert, and they may also want to delve into recent transactions, including related-party transactions in past three years and the existence of special purpose entities (SPEs).
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Due to the frequent absence of good information, the underwriter must make certain assumptions to arrive at a bid and exit strategy.
They are part of the procedures underwriters undertake to perform and document a "reasonable investigation" of unaudited information included in offering documents.
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D&O underwriters are carefully following these options-related matters as they unfold and are generally attempting a balanced, yet prudent, vetting of each company's unique situation.
Plus, we presented thousands of documents to the issuer's counsel, the underwriters and their counsel.
We intend to support the continued growth of Underwriters Reinsurance through additional investment and the accumulation of retained earnings; in particular, we intend initially to make an additional investment in Underwriters Reinsurance sufficient to increase its statutory surplus to at least $250 million by 1993 year-end.
According to the survey results, 41 percent of the underwriters said the greatest benefit of using BlitzDocs is the ability for underwriters, brokers and other mortgage process participants to have access to the loan file.