Underwrite - Definition and Overview

Debt & Equity underwriting

Debt and equity underwriting is the concept of securing the price and sale of a new issue of stocks or bonds. If a firm has taken the risk and responsibility to sell a specific amount of securities, and it can't sell them as planned, they may have to buy them themselves.

Flows and levels

Underwriting activity reported by Thomson Financial ([1] (http://www.thomson.com/financial/investbank/fi_investbank_league_tablearchive_debt.jsp)) ($ billion) (number of isses):

Global Debt, Equity & Equity-related

• 2004: 5,693 (20,066) (Q4 2004 report)
• 2003: 5,326 (19,706) (Q4 2003 report)
• 2002: 4,257 (?) (Q4 2003 report), 3,902 (14,070) (Q4 2002 report)
• 2001: 4,112 (?) (Q4 2002 report)

Global debt & equity disclosed fees

• 2004: 15.401 (6,890) (Q4 2004 report)
• 2003: 14.461 (8,023) (Q4 2003 report)
• 2002: 14.762 (6,696) (Q4 2003 report), 14.130.7 (5,649) (Q4 2002 report)
• 2001: 17.930 (7,027) (Q4 2002 report)

Insurance underwriting

Underwriting may also refer to insurance; the electrical safety organization Underwriters Laboratories was founded by a group of insurers after watching the House of Electricity on a local fairground destroyed by fire due to faulty wiring. A leading underwriter is Lloyd's of London.

Other

Underwriting may also refer to financial sponsorship of a venture.

See also

• Investment bank
• Thomson Financial League Tables

External links

• Underwriting (http://www.investopedia.com/terms/u/underwriting.asp)