What type of offering involves a firm commitment by an underwriter to purchase any unsubscribed shares?

A standby offering is a type of offering where an underwriter agrees to purchase any unsubscribed shares that remain after a rights offering is completed. In a rights offering, existing shareholders are given the right to purchase additional shares, often at a discounted price, before these shares are offered to other investors. The underwriter's commitment to buy any shares that are not taken up by the existing shareholders ensures that the issuing company can still raise the specified amount of capital, regardless of shareholder participation. This firm commitment mitigates the risk for the company when attempting to raise funds, reinforcing the role of the underwriter as both a facilitator and guarantor of the offering.

In contrast, public offerings generally involve a sale of shares to the general public without the same firm commitment structure from underwriters. Rights offerings are focused specifically on existing shareholders’ options to buy additional shares, while private placements are targeted sales of securities to a limited number of investors without a public offering process, which typically does not involve underwriting agreements in the same way standby offerings do.