Companies, especially investment banks, who agree to underwrite an issue of new securities currently have to buy all the public shares at a set price and resell them to the general public, hopefully at a profit.
An underwriting bank can enter sub-underwriting agreements with others, under which the latter agree to underwrite a certain amount of the securities.
This means the borough council, who had agreed to underwrite the action, was faced with an estimated bill of £450,000.
The ministry and legislators agreed on Tuesday that insurance companies cannot underwrite a life insurance policy for a minor until the he or she is at least 14 years old.
But in their report council officers recommended that councillors agree in principle to underwrite the loan for Fulford Cemetery, and revise the existing agreement to increase then annual fee.
they were willing to underwrite the construction of a ship
The race pits two multi-millionaires against each other, each willing to write personal cheques to underwrite their own campaigns.
‘We agreed to underwrite the value of all stock in the cash and carry from the date we got involved,’ said O'Neill.
America has seen the creation of e-investment banks that eschew the more traditional methods of business and instead underwrite and distribute share issues over the net.
Like motor insurance companies, privately-held insurance companies are driven by the profit motive, and, like motor insurance companies, they want to avoid the worst risks and underwrite the best ones.