What does a fully underwritten rights issue mean?

A fully underwritten rights issue refers to a situation where a company offers new shares to existing shareholders, and a financial institution (the underwriter) guarantees the purchase of any shares not taken up by shareholders. This ensures that the company raises the desired amount of capital, even if some shareholders choose not to participate. The underwriter assumes the risk of buying the unsold shares, thereby providing financial security for the company during the fundraising process.