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underwriting - 4 dictionary results

un⋅der⋅write

[uhn-der-rahyt, uhn-der-rahyt] verb, -wrote, -writ⋅ten, -writ⋅ing.
–verb (used with object)
1. to write under or at the foot of, esp. under other written matter.
2. to sign one's name, as to a document.
3. to show agreement with or to support by or as if by signing one's name to, as a statement or decision.
4. to bind oneself to contribute a sum of money to (an undertaking): Wealthy music lovers underwrote the experimental concerts.
5. to guarantee the sale of (a security issue to be offered to the public for subscription).
6. Insurance.
a. to write one's name at the end of (a policy), thereby becoming liable in case of certain losses specified in the policy.
b. to insure.
c. to assume liability to the extent of (a specified sum) by way of insurance.
d. to select or rate (risks) for insurance.
–verb (used without object)
7. to underwrite something.
8. to carry on the business of an underwriter.

Origin:
1400–50; late ME, trans. of L subscrībere to write underneath, sign, subscribe
un·der·write   (ŭn'dər-rīt')   
v.   un·der·wrote (-rōt'), un·der·writ·ten (-rĭt'n), un·der·writ·ing, un·der·writes

v.   tr.
  1. To assume financial responsibility for; guarantee against failure: underwrite a theatrical production.
    1. To sign (an insurance policy) so as to assume liability in case of specified losses.
    2. To insure.
    3. To insure against losses totaling (a given amount).
    4. To guarantee the purchase of (a full issue of stocks or bonds).
    5. To agree to buy the unsold part of (stock not yet sold publicly) at a fixed time and price.
    6. To write under or at the end of something.
    7. To subscribe to, especially to sign or endorse (a document).
    1. To guarantee the purchase of (a full issue of stocks or bonds).
    2. To agree to buy the unsold part of (stock not yet sold publicly) at a fixed time and price.
    3. To write under or at the end of something.
    4. To subscribe to, especially to sign or endorse (a document).
    1. To write under or at the end of something.
    2. To subscribe to, especially to sign or endorse (a document).
  2. To support or agree to (a decision, for example).
v.   intr.
To act as an underwriter, especially to issue an insurance policy.

Underwriting

Un"der*writ`ing\, n. The business of an underwriter,

Underwriting

1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt).

2. The process of issuing insurance policies.

Investopedia Commentary

The word "underwriter" is said to have come from the practice of having each risk-taker write his or her name under the total amount of risk that he or she was willing to accept at a specified premium. In a way, this is still true today, as new issues are usually brought to market by an underwriting syndicate in which each firm takes the responsibility (and risk) of selling its specific allotment.

Related Links

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See also: Competitive Bid, Eating Stock, Greenshoe Option, Investment Bank, IPO, Life Insurance, Negotiated Underwriting, Public Offering Price (POP), Takedown

Also spelled: under-writer, under writing, underwrite, underwriter, underwritting

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