| || InvestHub.com's |
Finance Dictionary and Glossary of Investment Terms
A firm that brings out new securities issues, agreeing to purchase and resell them. Often a lead underwriter and several other underwriters will work together on a given issue.
A firm, usually an investment bank, that buys an issue of securities from a company and resells it to investors. In general, A party that guarantees the proceeds to the firm from a security sale, thereby in effect taking ownership of the securities.
An investment banker who assumes the risk of bringing a new securities issue to market. The underwriter will buy the issue from the issuer and guarantee sale of a certain number of shares to investors; this is firm-commitment underwriting. To spread the risk of purchasing the issue, the underwriter often will form a syndicate (underwriting group, purchase group) among other investment firms. If the investment firm is unwilling to buy the issue outright, other underwriting forms may be used. (See best-efforts underwriting, syndicate, syndicate manager)