A Back Stop in finance refers to a guarantee or a form of financial support provided to ensure that a particular financial transaction, such as an offering or a deal, is fully executed. The backstop is typically provided by a third party, often an investment bank, a large investor, or a group of investors, who agree to purchase any unsubscribed shares or securities in a new issuance.

Here are a few examples of how a backstop might be used:

1. Rights Offering: In a rights offering, existing shareholders are given the opportunity to buy additional shares at a discounted price. However, if some shareholders decide not to participate, the company may have a backstop agreement in place with a financial institution or a large investor who agrees to purchase any remaining shares. This ensures that the company raises the desired amount of capital.
2. Mergers and Acquisitions: In a merger or acquisition deal, a backstop can involve a guarantee from a third party to provide financing if needed, ensuring that the deal can be completed even if other financing sources fall through.
3. Credit Default: In the context of credit, a backstop might refer to a backup source of funds or a line of credit that a borrower can rely on if they are unable to obtain financing from other sources.

Overall, a backstop provides security and confidence that a transaction will go through as planned, even if certain conditions aren’t met or if there is less interest from other investors.