A standby underwriting agreement commits the issuing bank to acquire any unsold securities.

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A standby underwriting agreement is a type of agreement in which the underwriter agrees to purchase any unsold securities in the event they are not purchased by investors. This commitment by the underwriting bank helps to ensure that the offering will be fully subscribed, providing assurance to the issuer that its securities will be sold, and helping to mitigate the risk of a failed offering.

A Standby Underwriting Agreement Commits the Issuing Bank to Acquire