Underwriting

Underwriting can increase certainty over an issue's proceeds, in exchange for a fee and subject to contractual conditions. The exact commitment may be firm or limited and can include termination provisions. It does not guarantee the subsequent market price or the success of the project financed. Consider the underwriter's role, issue size, market demand, price and potential conflicts. Distinguish an underwriting commitment from an adviser merely using best efforts to place securities, where the issuer may bear more of the subscription risk.