underwriter

(noun)

An entity which markets newly issued securities

Related Terms

Examples of underwriter in the following topics:

  • Underwriter

    • Investment bank underwriters help securities issuers lessen their risk in exchange for a premium.
    • However, investment banks are involved in the underwriting of all types of securities, not just stock.
    • That is where the job of the security underwriter comes in.
    • The underwriter offers to take on some of the risk of the offering in exchange for a premium.
    • There are sometimes multiple investment banks involved in the underwriting of a security.

  • Employment in Finance

    • In banking, employees may serve the range of roles needed to run banks, from tellers to financial planners and underwriters to wealth managers.
    • In insurance, there are insurance brokers and underwriters as well as actuaries and a host of other positions such as insurance claims investigators and agents.

  • The Glass Steagall Banking Act

    • Politicians and the public thought commercial banks should not underwrite new stock and bonds for corporations because they believed banks were underwriting "risky" securities.
    • Consequently, borrowers could pay more for issuing new securities than they would pay if commercial banks could underwrite new securities.

  • The Cost of New Common Stock

    • Flotation costs include all costs of issuing the securities, such as banker's fees, legal fees, underwriting fees, filing costs, etc.

  • International Credit Rating Agencies

    • Coface, France's export credit underwriter, is another international credit-rating agency.

  • Securities Act of 1933

    • Section 4 of the Act limits its application to public offerings (according to SEC guidelines, more than 25 offerees) by issuers and their underwriters (i.e. investment banks).
    • Any offering of the securities by the issuer or underwriter must thereafter be accompanied by the prospectus.

  • Types of Stock Market Transactions

    • Most companies undertaking an IPO do so with the assistance of an investment banking firm acting in the capacity of an underwriter.
    • Underwriters provide a valuable service, which includes help with correctly assessing the value of shares (share price), and establishing a public market for shares (initial sale).

  • Common and Preferred Stock

    • There are capital costs associated with equity financing, including accounting and legal costs, as well as underwriting and filing fees.

  • IPOs

    • The number of each type of demand or piggyback rights, the percentage of investors necessary to exercise these rights, allocation of expenses of registration, the minimum size of the offering, the scope of indemnification and the selection of underwriters and brokers are all areas of potential negotiation in the registration rights agreement.

  • Debt

    • Loan syndication is a risk management tool that allows the lead banks underwriting the debt to reduce their risk and free up lending capacity.