Firm Commitment
Definition of 'Firm Commitment'1. A lending institution's promise to enter into a loan agreement with a specific entity within a certain period of time.2. An underwriter's agreement to assume all inventory risk and purchase all securities directly from the issuer for sale to the public at the price specified. |
|
Investopedia explains 'Firm Commitment'1. The lender specifies the terms that that must be met in order for the loan to be processed. Also known as a "standby loan commitment".2. In a firm commitment, underwriters act dealers and are responsible for any unsold inventory. The dealer profits from the spread between the purchase price and the public offering price. Also known as a "firm commitment underwriting". |
Related Definitions
Articles Of Interest
-
Interpreting A Company's IPO Prospectus Report
Learn to decipher the secret language of the IPO prospectus report - it can tell you a lot about a company's future. -
5 Tips For Investing In IPOs
Thinking of investing in IPOs? Here are five things to remember before jumping into these murky waters. -
Pre-Qualified Vs. Pre-Approved - What's The Difference?
These terms may sound the same, but they mean very different things for home buyers. -
A Look At Primary And Secondary Markets
Knowing how the primary and secondary markets work is key to understanding how stocks trade. -
The Road To Creating An IPO
Through an Initial Public Offering, or IPO, a company raises capital by issuing shares of stock, or equity in a public market. Generally, this refers to when a company issues stock for the first ... -
Digging For Profitable Delistings
Deregistration can provide opportunities for savvy investors. We'll show you how to cash in. -
Coty Readies IPO
Fragrance maker Coty filed a registration statement amendment May 28 that sees it raising as much as $1.2 billion from its IPO. Coty tried to buy Avon for $10.7 billion in 2012 but was unsuccessful. ... -
Ski-Doo IPO Raises $254 Million: Should You Buy?
Read on and I'll look into if you should buy Ski-Doo's stock once it becomes available. -
Marketo Jumps 67% in IPO Debut-Time To Sell?
Software startup Marketo went public May 17. Its stock closed up 64% in its first day of trading. Time to sell your shares and move on? I'll have a look... -
Claire's: Should You Accessorize With Its IPO?
Apollo Global Management is taking accessories retailer Claire's public. Should you get in on this IPO? I'll take a look.
Free Annual Reports