underwriting

Definitions (3)

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.
2. The process of insuring someone or something.
3. The process by which a lender decides whether a potential creditor is creditworthy and should receive a loan.

Use underwriting in a sentence

You should always be wary of any underwriting unless you have full faith in that company over a good period of time.

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You should try and do all of the research you can before you ever decide to be the first to invest in any underwriting.

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Big Travel Ventures was able to guarantee a large rate of return by negotiating a much higher minimum than is common from the person doing the underwriting.

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