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Standby Underwriting (Standby)

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Definition of 'Standby Underwriting (Standby)'

A type of underwriting in which an investment bank (the underwriter) agrees to purchase the portion of the new securities issue that remains after a public offering.
Investopedia Says

Investopedia explains 'Standby Underwriting (Standby)'

This eliminates the issuer's risk, but it increases the investment banker's risk.

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