The investment bank, commercial bank, or brokerage firm that works with an issuer to sell a new issue. Issuers may select underwriters by obtaining bids or on a negotiated basis. Potential underwriters may form groups called underwriting syndicates to bid collectively. American Banker Glossary
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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. Bloomberg Financial Dictionary
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A market participant who agrees to buy a new issue at a specified price if no-one else is prepared to purchase the securities offered. The underwriter will receive commission to compensate him for the risk taken that he will have to buy an unsuccessful issue and lose money as a result. Dresdner Kleinwort Wasserstein financial glossary
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An investor or institution who/that agrees to take up the unsubscribed shares should there prove to be little demand by investors, when a new issue of shares or securities takes place. Underwriters will receive a handsome fee for taking on this risk. Financial Services Glossary
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(see underwriting) London Stock Exchange Glossary
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underwriter un‧der‧writ‧er [ˈʌndəˌraɪtə ǁ -dərˌraɪtər] noun [countable]
1. FINANCE a financial institution that underwrites a share issue, that arranges to sell shares to investors and agrees to buy any shares that are not bought by them
2. INSURANCE a person, usually someone who works for an insurance company, who calculates the risk involved in an activity and decides how much insurance will cost to cover it
3. INSURANCE a person who agrees to accept the risk of any loss under an insurance contract:
• one of the country's foremost insurance underwriters
maˌrine ˈunderwriter INSURANCE
a person or company that makes marine insurance contracts
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► See Lead Manager/Underwriter.
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underwriter UK US /ˈʌndəˌraɪtər/ US /-dəraɪṱɚ/ noun [C]
► INSURANCE an organization, or someone working for one, that underwrites insurance policies: »
Mortgage insurance underwriters refuse coverage for loans made to borrowers with credit scores less than 575.
► STOCK MARKET a financial organization, or someone working for one, that underwrites new shares when they are offered for sale: »
The biggest underwriter was Swiss Bank Corporation in London agreeing to back one third of the shares.
Financial and business terms. 2012.