underwriting


Definition 1
The procedure by which an underwriter brings a new security issue to the investing public in an offering. In such a case, the underwriter will guarantee a certain price for a certain number of securities to the party that is issuing the security (in exchange for a fee). Thus, the issuer is secure that they will raise a certain minimum from the issue, while the underwriter bears the risk of the issue.

Definition 2
The process of insuring someone or something.

Definition 3
The process by which a lender decides whether a potential creditor is creditworthy and should receive a loan.

Related Terms

allotment -

firm commitment offering -  More

best efforts offering -  More

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... part of the Brokerages, Insurance and IPOs subjects.

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