firm commitment investment & finance definition
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.
Definition
Firm commitment
A lender's agreement to make a loan to a specific borrower on a specific property.
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Firm commitment underwriting
Definition:
An Underwriting in which an Investment banking Firm commits to Buy and Sell an entire Issue of Stock and assumes all financial responsibility for any unsold shares. ...
Firm Commitment Agreement between a company and its lead investment banker in which the latter is obligated to sell all the shares to be issued.
Firm commitment underwriting: A promise from the underwriters of an issue to purchase the securities for their own account if they cannot be sold to customers.
FIRM COMMITMENT UNDERWRITING. A type of offering in which the underwriter agrees to purchase all of the shares being offered regardless of whether investors purchase the shares.
In the firm commitment contract the underwriter guarantees the sale of the issued stock at the agreed-upon price. For the issuer, it is the safest but the most expensive type of the contracts, since the underwriter takes the risk of sale.[1] ...
firm commitment lending A formal offer by a lender making explicit the terms under which it agrees to... firm commitment offering An arrangement in which an underwriter assumes the risk of bringing a new securities...
This includes the fee structure, as well as a firm commitment by the underwriter. A firm commitment is an agreement by the underwriter to purchase all issues of the security. The underwriter would then resell these securities to the public.
FUTURES CONTRACT - A firm commitment to make or accept delivery of a specified quantity and quality of a commodity during a specific month in the future at a price agreed upon at the time the commitment was made.
What is a Futures Contract?
A commodity futures contract is a firm commitment to deliver or receive a specific quantity and quality of a commodity during a designated month at a price determined by open auction on a futures exchange.
Contractual Plan
A type of accumulation plan where a mutual fund investor makes a firm commitment to invest a specified amount of money over a specific period of time.
Contractual Plan - A type of accumulation plan in which an investor in mutual funds makes a firm commitment to invest a given amount of money over a given time.
Prime Underwriting Facility (PUF) (in banking)
Consortium Underwriting (insurance term)
Underwriting Gain (LOSS) (insurance term)
Firm Commitment (business term)
Underbanked (finance term)
Field Underwriting (insurance term) ...
Percentages are set by the SEC to allow for three types of potential losses in rapid liquidation: fluctuations in the market value of securities positions, losses in open contractual commitments made in firm commitment underwritings, ...
Under the firm commitment contract, the investment bank guarantees the sale of the whole issue at the negotiated price. This type of agreement is the riskiest for the underwriter and consequently, the most expensive for the issuing entity.
(Compare 'Firm Commitment'.) [EPA] Underwriters do not commit themselves to selling a security issue but promise only to use best efforts.
 See also: Share, Investment, Securities, Offer, Stock
  
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