Definitions for "Firm commitment underwriting"
If the UNDERWRITER buys an entire issue from an ISSUER and guarantees the sale of a certain number of SHARES to investors, it is called a FIRM COMMITMENT UNDERWRITING.
A public offering of securities by an underwriting syndicate, where the underwriting agreement contains a firm commitment by the underwriters to buy all of the shares. In practice, the underwriting agreement is not signed until indications of interest have been gathered by brokers for sales of more than all the shares. Large, older securities firms will usually participate only in firm commitment underwriting and not in best efforts underwriting.
An undewriting in which an investment banking firm commits to buy the entire issue and assumes all financial responsibility for any unsold shares.