Underwriting Group

Temporary association of investment bankers, organized by the originating Investment Banker in a New Issue of securities. Operating under an Agreement Among Underwriters it agrees to purchase securities from the issuing corporation at an agreed-upon price and to resell them at a Public Offering Price, the difference representing the Underwriting Spread. The purpose of the underwriting group is to spread the risk and assure successful distribution of the offering. Most underwriting groups operate under a divided syndicate contract, meaning that the liability of members is limited to their individual participations. Also called Distributing Syndicate, Purchase Group investment banking group, or syndicate. See also Firm Commitment; Underwrite; Underwriting Agreement.

Association of commercial banks and investment banks that purchases a new offering of securities, generally for immediate resale to investors through a public offering. Also called an underwriting syndicate. Members of the underwriting group, acting through an Agreement Among Underwriters, purchase the offering at an agreed price for resale at the public offering price. The group signs a purchase offer, or an Underwriting Agreement with the issuer that defines the terms of the proposed offering, and the amount to be purchased by each member of the group. See also Note Issuance Facility; Standby Underwriting; Tender Panel.