firm commitment

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.

firm commitment

In securities offerings, a commitment by the underwriter to purchase securities from the issuer for resale to the public. Thus, the sale is guaranteed by a firm commitment to the issuer. With a firm commitment, the risk of being unable to sell an entire issue at the offering price is transferred from the issuer to the underwriter. Also called bought deal.

firm commitment

A lender's unqualified and irrevocable promise to grant a loan for a specified amount, which may be a firm amount or a certain percentage of the appraised value.The commitment will also specify the interest rate,term,and collateral.For commercial mortgages,the borrower should ask that the firm commitment include a statement of anticipated legal fees and other fees and expenses and,if possible,negotiate an upper limit to attorneys'fees.

References in periodicals archive ?
The supplier must make a firm commitment that the buses that are subject to the contract will operate on the buses under the climatic conditions of bucharest and will achieve the microclimate conditions in the passengers~ salon as provided in the tender book.
The overhaul of the Caloocan City Police station demonstrates the firm commitment of the Philippine National Police (PNP) to continuously cleanse its ranks, Malacanang said on Sunday.
We made a very firm commitment to our shareholders and investors to improve our internal processes at the EGM, and they in turn made an equally firm commitment to support us in our mission of delivering affordable housing.
M2 EQUITYBITES-March 20, 2015-Aldermore welcomes Budget 2015 but wanted firm commitment on Annual Investment Allowance
BANKING AND CREDIT NEWS-March 20, 2015-Aldermore welcomes Budget 2015 but wanted firm commitment on Annual Investment Allowance
In the new words, you'll find a firm commitment to put Scotland first.
On April 21, 2014, the company announced that it commenced the firm commitment underwritten offering portion of the second step conversion to sell shares of common stock not subscribed for in the subscription offering to the general public at USD10.
Priority projects including affordable housing, Rental Assistance Demonstration projects, projects under any multifamily or health-care program in Hurricane Sandy-affected areas, and those projects for which a firm commitment has already been issued that require an increased mortgage amount.
Summary: Morocco has renewed here on Tuesday its firm commitment to fight terrorism and unreserved condemnation of all forms of terror.
Finnair makes first firm commitment to A350 XWB Finnair yesterday made the first firm commitment for the new A350 XWB powered by the Rolls-Royce Trent XWB, signing a contract for 11 of the type along with a flexible mix of seven A330s and A340-300s.
This transaction demonstrates Mack-Cali's firm commitment to building value by securing long-term leases with high credit-quality tenants.
While I'm sure many councillors would have wished to support a firm commitment now to open a school by 2007, to have voted for that when no funding has been identified would have been irresponsible.