standby underwriting Finance Definition
An underwriting agreement in which the
underwriter agrees to purchase any unsold shares of a stock offering being made
to current shareholders. The underwriter earns a standby fee, as well as other
fees. However, the underwriter also assumes risk if investors dont exercise
their rights or if the market price of the stock falls during the underwriting
period. Often used in conjunction with a rights offering.
Browse dictionary entries near standby underwriting
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