underwrite

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Underwrite

To guarantee, as to guarantee the issuer of securities a specified price by entering into a purchase and sale agreement. To bring securities to market.

Underwriting

1. The process of placing a new issue with investors. Underwriting involves the issuing company using one or (usually) more companies who are each responsible for placing a certain amount of the new issue. The underwriting firms contact potential investors to gauge interest and sell the issue. Underwriters guarantee the price for a certain number of shares of the new issue. See also: Bracketing, Oversubscribed, Undersubsribed.

2. Due diligence a lender conducts to ensure that a potential borrower is able to repay the loan.

underwrite

To assume the risk of securities' sale by purchasing the securities from the issuer for resale to the public. Investment bankers often assume this underwriting function in order to guarantee that the issuer will receive all the funds needed from the sale. See also best-efforts basis, freed up, hot issue, investment banker, peg, standby underwriting.

underwrite

(1) To evaluate the risk of a situation,as in loan underwriting to determine the borrower's financial strength,ability to repay the debt in the event of an interruption of cash flow,and willingness to repay the debt as evidenced by the borrower's credit score or credit history. (2) To guarantee a sale, such as an investment banker who underwrites the sale of securities and will purchase any that do not sell on the open market. (3) To assume liability, such as an insurance company that underwrites a policy.

References in periodicals archive ?
The proposal would also continue to prohibit an affiliated bank from knowingly advising a customer to purchase securities underwritten or dealt in by a section 20 affiliate unless it notifies the customer of its affiliate's role The proposal also continues to prohibit a bank public customer information without the customer's consent.
To support future business to be underwritten by RSUI, Alleghany has acquired Underwriters Reinsurance Company ("URC"), an insurance company admitted in 50 states, from Swiss Re America Holding Corporation and capitalized it at approximately $500.
To support future business to be underwritten, Alleghany has capitalized URC at approximately $500 million.
Effective July 1, 2003, Alleghany, through its wholly-owned subsidiary, Alleghany Insurance Holdings LLC, will acquire RSUI, renewal rights to the ongoing business underwritten by RSUI and the related unearned premium reserve portfolio for $115.
I envision the development of a much stronger and more diverse life/health insurance industry, responding to the essential needs of the mid-market with rapidly underwritten and issued products.
Vianet's policies are underwritten by XL Specialty Insurance Company, a member of XL Capital Ltd.