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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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Affiliated directors from prestigious underwriting firms held four seats or 13% of the lead underwriting seats.
Starr & Co., the insurance underwriting firm founded by former AIG head, Maurice "Hank" Greenberg, subleased 90,000 s/f from pharmaceutical giant, sanofi-aventis, at 90 Park Avenue last week.
The underwriting firm said that it has enhanced benefits of its Niger Flexible Investment Assurance Plan (NIFIAP).
* The above ranking of firms is based on the total deal proceeds of debt and equity offerings on which the underwriting firm served as a bookrunner (senior lead) or co-manager for the full year of 2010.
Muriel Siebert & Co Inc is said to be the top-ranked minority and women-owned municipal bond underwriting firm in the country and is the only minority and women-owned firm to be nationally ranked in the top ten.
Nigerian underwriting firm, Consolidated Hallmark Insurance (CHI) Plc, has posted a profit.
The above ranking of firms is based on the total deal proceeds of taxable debt and equity offerings on which the underwriting firm served as a bookrunner (senior lead) or co-manager.
European Investment Bank (EIB) is planning to offer AUD231m worth of two-year ecology bonds in a sale which starts on Tuesday Dow Jones has reported, citing an official at underwriting firm Daiwa Securities.
Responsibilities: He contributes to the strategic planning and business development of this top-rated minority- and women-owned municipal bond underwriting firm that ranked No.
World Bank is planning to sell up to AUD35m of five-year Uridashi bonds in a sale which runs through May 27, 2010 Dow Jones has reported, citing an official at underwriting firm SMBC Friend Securities.