Underwriting refers to the process that a large financial service provider (bank, insurer, investment house) uses to assess the eligibility of a customer to receive their products (equity capital, insurance, mortgage, or credit).
Underwriting
It is a process by which investment banks raise capital from investors on behalf of corporations issuing the securities.
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Stand-by underwriting, also known as strict underwriting or old-fashioned underwriting is a form of stock insurance: the issuer contracts the underwriter for the latter to purchase the shares the issuer failed to sell under stockholders' subscription ...
Definition
Underwriting
The process of bringing a new security issue to the market, by reselling the issue to the public for a profit. Underwriting is one of the main activities of an investment banker.
RELATED TERMS ...
Underwriting spread
Definition:
The income that is generated by the underwriting syndicate and the selling group, ...
Underwriting spreads are the difference between the price per share that is paid to an issuing corporation by an underwriter or underwriting group, and the public offering price that the underwriter offers to the public.
Underwriting in which the underwriter provides its best efforts to get the deal done, whether it is selling stock or debt. Contrasts with firm-commitment underwriting, in which the underwriter assumes the risk of the issue being poorly received.
All or None Underwriting - All or none underwriting is a type of securities an underwriter issues, but will cancel at his/her will if they are unable to resell the stocks.
Underwriting In insurance, the term refers to the process of examining and selecting risks for insurance and determining in what amounts and on what terms the insurance company will accept the risk.
Underwriting an IPO
An IPO is typically done through an underwriter who will act as the "sales" agent for the company. The deal may be structured through the employment of a single firm, or multiple.
UNDERWRITING AGREEMENT - An infrequently used term that may refer to either the agreement among underwriters or the bond purchase agreement, depending upon the particular new issue of municipal securities.
Underwriting
The process by which investment bankers bring new issues to the market.
Underwriting Manager
The lead firm in a group of underwriters responsible for a new issue.
Underwriting
An arrangement by which a company is guaranteed that an issue of shares will raise a given amount of cash. Underwriters undertake to subscribe for any of the issue not taken up by the public. They charge commission for this service.
Underwriting Manager - (1) In a negotiated underwriting, the investment banker whose client is the corporation wanting to bring out a new issue.
Underwriting
The purchase for resale of a new issue of securities by an investment dealer or group of dealers who are also known as underwriters. The formal agreements for these transactions are called underwriting agreements.
The Underwriting Process
The IPOs of all but the smallest of companies are usually offered to the public through an "underwriting syndicate, ...
Eastern underwriting agreement: A firm commitment underwriting in which syndicate members are liable for their share of any unsold securities, regardless of how much of their allotment they sold.
Underwriting firms that have a high percentage of individual investors as clients are more likely to allocate portions of IPO shares to individuals.
Underwriting agreement
The contract between a corporation issuing new publicly offered securities and the managing underwriter as agent for the underwriting group. Compare to agreement among underwriters.
UNDERWRITING AGREEMENT. Contract between the company and the underwriter that sets forth the terms and conditions of a securities offering, including the type of underwriting, the underwriter's compensation, the offering price, and number of shares.
Underwriting accounts are headed by a manager. When an account is made up of several groups of underwriting firms that normally function as separate accounts, the larger account is often managed by several underwriters, ...
An underwriting expression showing a conditional, non-binding interest in buying a security that is currently in registration (awaiting effectiveness by the SEC). The investor's broker is required to provide the investor with a preliminary prospectus.
Negotiated Underwriting/Deal A means by which firms choose the underwriter for a new security issue. See competitive bidding.
Negotiated underwriting
A securities offering process in which the purchase price paid to the issuer and the public offering price are determined by negotiation rather than through competitive bidding.
Best-efforts underwriting: Underwriting without a guarantee to the issuer to sell the securities. The underwriters act as brokers.
[ITDS] account or underwriting account An association of underwriters (headed by a manager or joint co-managers) formed in accordance with an agreement among underwriters for the purpose of purchasing an issue from an issuer and reoffering it or ...
callable loan A loan used by brokerage firms to maintain margin accounts or finance underwriting... callable stock A stock which the issuer may buy back on demand at a specified price. Also...
The idea is that life insurance companies are good at underwriting insurance risks, collecting premiums, and servicing the policies, but needn't tie up their money for the duration.
NASDR carries out its regulatory responsibilities through education, examinations, market surveillance, registration of securities personnel, advertising and underwriting reviews, disciplinary actions that violate rules, ...
Selecting an Investment Bank - acts as an advisor and performs the underwriting function. Companies typically select the investment bank based on their industry experience.
The sum of these two factors (the combined ratio) measures whether the insurance company is profitable on an underwriting basis (that the funds received from customers are less than the losses and expenses related to such policies.) In general, ...
Underwriting incomeFor an insurance company, the difference between the premiums earned and the costs of settling claims.
Five investment companies, the underwriting syndicate, come together to spread the risk and profits associated with underwriting a new security issue. The investment companies in the syndicate work to sell the shares of PrimeXY in the market.
In the securities-underwriting business, those proceeds are the total amount of fees that a company pays to an underwriting group in connection with a public offering of its stock or bonds.
To raise money for expansion, the company's founders approached a Wall Street underwriting firm (an investment banker) and had them sell stock to the public.
A preliminary prospectus issued by stock-underwriting firms to measure investor interest in a prospective stock offering.
When an investor buys an ETN, the underwriting bank promises to pay the amount reflected in the index, minus fees upon maturity.
The services of the Investment Bank may include advisory as well as underwriting. They can advise the issuer on the characteristics of the issue, such as pricing and timing of the offering.
Investment banker who singly as a member of an underwriting group or syndicate, agrees to purchase a new issue of securities from an issuer and distribute to investors, making a profit on the underwriting spread.
UNSYSTEMATIC RISK ...
underwriter: An investment banker who, singly or as a member of an underwriting group or syndicate, agrees to purchase a new issue of securities from an issuer and distribute it to investors, making a profit on the underwriting spread.
The most common way to issue bonds is through a process called underwriting. This is when one or more banks buys an entire issue of bonds from an issuer and re-sells them to investors.
Securities Act: Provincial legislation regulating the underwriting, distribution and sale of securities.
Shares: A document signifying part ownership in a company. The terms "share" and "stock" are often used interchangeably.
This process of selling the new stock issues to prospective investors in the primary market is called underwriting. The securites that they sell are called initial public offerings (IPOs).
It may be used by specialists to help finance investments of stock they deal in; by brokerage firms to finance the underwriting of new issues of corporate and municipal securities; to help finance a firm's own investments; ...
When a company goes through the traditional IPO process, they are forced to work closely with an underwriting team from an investment bank and draft reams of forms for the SEC.
Underwriter: Refers to the investment banker who alone or as a member of an underwriting group or syndicate agrees to purchase a new issue of securities from an issuer and distribute them to its investors, ...
Primary market Market for the initial sale of a corporation's securities to the underwriting community. Later sales to individual investors are made in the secondary market.
This is a strategy that can potentially be used with your IRA to form a plan for long term investing. Many IRA underwriting companies may not allow you to do this; ...
The stock exchange procedure is if before any stock can be traded and it has to be listed in the index first. Then a new stock will be issued in the primary market and the system is called underwriting and the selling of the new issues is called the ...
An investment banking firm committed to successful distribution of a public issue, failing which the firm would take the securities being offered (that is, buy) into its own books. Some countries also provide for underwriting on best effort basis.
These brokers are also involved in underwriting and investment banking for the companies. Even though there are restrictions in place to prevent a conflict of interest, brokers have an ongoing relationship with the company under analysis.
Restricted stock
Stock that must be traded in compliance with special SEC regulations concerning its purchase and resale. These restrictions generally result from affiliate ownership, M&A activity, and underwriting activity.
Investors purchasing stock in IPO's generally must be prepared to accept very large risks for the possibility of large gains. IPO's by investment companies (closed end funds) usually contain underwriting fees which represent a load to buyers.
 See also: Investment, Market, Securities, Issue, Share
  
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