Underwriting contract

In investment banking,[1] an underwriting contract[2] is a contract between an underwriter and an issuer of securities. The following types of underwriting contracts are the most common:

* In the firm commitment contract, the underwriter guarantees the sale of the issued stock at the agreed-upon price. For the issuer, it is the safest but the most expensive type of the contracts, since the underwriter takes the risk of sale.[2]
* In the best efforts contract, the underwriter agrees to sell as many shares as possible at the agreed-upon price.[2]
* Under the all-or-none contract, the underwriter agrees either to sell the entire offering or to cancel the deal.[2]

Stand-by underwriting,[3] also known as strict underwriting or old-fashioned underwriting is a form of stock insurance: the issuer contracts the underwriter for the latter to purchase the shares the issuer failed to sell under stockholders' subscription and applications.[4]

## References

1. ↑ "Underwriting" (in en-US). https://corporatefinanceinstitute.com/resources/equities/underwriting-overview/.
2. ↑ 2.0 2.1 2.2 2.3 "The Investment Banking Handbook" by J. Peter Williamson, 1988, ISBN 0-471-81562-4 , ""Underwriting Contracts", p. 128
3. ↑ "What is Underwriting?" (in en-US). https://learn.robinhood.com/articles/1TC5Z1kxWZ8HvVKTVRU97v/what-is-underwriting/.
4. ↑ "The Law of Securities Regulation" by Thomas Lee Hazen, 1996, ISBN 0-314-08587-4, p. 405.

* v
* t
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Corporate finance and investment banking

Capital structure|

* Convertible debt
* Exchangeable debt
* Mezzanine debt
* Pari passu
* Preferred equity
* Second lien debt
* Senior debt
* Senior secured debt
* Shareholder loan
* Stock
* Subordinated debt
* Warrant

Transactions
(terms/conditions)|

| Equity offerings|

* At-the-market offering
* Book building
* Bookrunner
* Bought deal
* Bought out deal
* Corporate spin-off
* Equity carve-out
* Follow-on offering
* Greenshoe
* Reverse
* Initial public offering
* Private placement
* Public offering
* Rights issue
* Seasoned equity offering
* Secondary market offering
* Underwriting

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Mergers and
acquisitions|

* Buy side
* Control premium
* Demerger
* Divestment
* Drag-along right
* Management due diligence
* Managerial entrenchment
* Minority discount
* Pitch book
* Pre-emption right
* Proxy fight
* Post-merger integration
* Sell side
* Shareholder rights plan
* Special-purpose entity
* Special situation
* Squeeze-out
* Staggered board of directors
* Stock swap
* Super-majority amendment
* Tag-along right
* Takeover
* Reverse
* Tender offer

Leverage|

* Debt restructuring
* Debtor-in-possession financing
* Financial sponsor
* Leveraged buyout
* Leveraged recapitalization
* High-yield debt
* Private equity
* Project finance

Valuation|

* Accretion/dilution analysis
* Adjusted present value
* Associate company
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* Conglomerate discount
* Cost of capital
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* Economic value added
* Enterprise value
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