Corporate actions
Underwriter
The investment bank that arranges a share or bond issue and often guarantees to buy what is unsold.
How it works
Underwriters price the offer, market it to institutions, and take a fee. In a firm-commitment deal they buy the whole issue and resell it, taking the risk of not placing it.
Their research analysts frequently initiate coverage on the company shortly after the offering, which is a conflict the rules attempt to manage rather than remove.
Related terms
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