firm commitment

firm commitment definition - business

firm commitment

In securities offerings, a commitment by the underwriter to purchase securities from the issuer for resale to the public. With a firm commitment, the risk of being unable to sell an entire issue at the offering price is transferred from the issuer to the underwriter. Also called bought deal.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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