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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 ?
All of this information is readily available to underwriters, even on motor vehicles reports that used to be batch processed, which delayed the underwriter and often ended up [causing] the underwriting window of opportunity to disappear--the first 60 days in many states," said Webster.
Underwriters have made changes through agents and representatives who speak to them on the customer's behalf.
Underwriters may want to review the firm's insider trading policy, including its efforts to comply with SEC Rule 10b5-1, as well as procedures for complying with new accelerated reporting requirements.
My camp insurance underwriter is concerned about insurance to value on several of my buildings.
Training underwriters is an investment in risk management as well.
The underwriter must identify areas of neglect and abuse in case the property was "milked" during the foreclosure process.
49 were intended only for underwriters with a due diligence defense, such letters often were provided to other parties.
The truth is that underwriters often are frustrated by their inability to get the information they need, and may be less willing to accept opaque information on how stock options have been handled or how compensation is granted to executives.
If your company has been involved in a quality process, it's best if the underwriters, the underwriter's counsel and the issuer's counsel are schooled in the concepts of total quality management.