Underwriting

In a securities offering, underwriting is the process through which investment banks or other underwriters help an issuer structure, price, purchase, or distribute securities to investors.

A simple example

An underwriter may buy securities from an issuer and resell them to public investors under an offering agreement.

Why this matters to income investors

Underwriting terms, compensation, demand, and conflicts can affect how newly issued securities reach the market.

How to use underwriting in your research

Read the prospectus for offering price, proceeds to the issuer, underwriting discounts, use of proceeds, stabilization, and conflicts.

This material is general education and information, not individualized investment, tax, or legal advice.