Underwriting contract

In investment banking, an underwriting contract is a contract between an underwriter and an issuer of securities.

The following types of underwriting contracts are most common:[1]

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 and applications.[2]

References

  1. 1 2 3 4 "The Investment Banking Handbook" by J. Peter Williamson, 1988, ISBN 0-471-81562-4 , ""Underwriting Contracts", p. 128
  2. "The Law of Securities Regulation" by Thomas Lee Hazen, 1996, ISBN 0-314-08587-4, p. 405.
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