Underwriting

When a company offers to the public the opportunity to buy shares on the occasion of the company converting to being a public company, it wants to guarantee that the offer will be successful

So an underwriter, typically a merchant bank, will guarantee that if the public fails to make applications to buy all the shares that are on offer, the merchant bank promises to buy any that are not applied for

So an underwriter is a guarantor of the success of the public offer

OK?