One of the underlying parties involved in a credit derivative contract. The reference entity bears the credit risk of the contract, and can be a corporation, government or other legal entity that issues debt of any kind. If a credit event such as a default occurs and the reference entity is unable to satisfy the conditions of the bond, the buyer of the credit default swaps receives payment from the seller. |||The reference entity is essentially the party upon which the two counterparties in the transaction are speculating. The seller of the transaction is selling protection against the default of the reference entity. The buyer of the securitized credit derivative believes that there may be a chance that the reference entity will default upon their issued debt and is therefore entering the appropriate position.
The act of discounting a short-term negotiable debt instrument for a second time. Banks may rediscount these short-term debt securities to assist the movement of a market that has a high demand for loans. When there is low liquidity in the market, banks can generate cash by rediscounting short-term securities. |||A central bank's discount facility is often called a discount window. The term comes from the days when a clerk would go to a window at the central bank to rediscount a company’s securities.
A specific type of letter of credit in which a buyer extends an unsecured loan to a seller. Red Clause Letters of Credit permit documentary credit beneficiaries to receive funds for any merchandise outlined in the letter of credit. These letters are commonly used by beneficiaries who act as purchasing agents for buyers in another country. |||The funds provided in a Red Clause Letter of Credit are known as advances. These advances are then deducted from the face amount of the credit when it is presented for payment. Red Clause Letters are usually employed to facilitate international exports and trade.
The risk that future proceeds will have to be reinvested at a lower potential interest rate. |||This term is usually heard in the context of bonds. This "reinvestment risk" is especially evident during periods of falling interest rates where the coupon payments are reinvested at less than the yield to maturity at the time of purchase.
A medium-term, subordinated, unsecured debt obligation usually issued by a multinational corporation. Retail notes can be purchased directly from the issuer at par in $1,000 increments with no accrued interest or added markups. They will usually pay a fixed interest rate for nine months or more (after that, the rate may vary). Retail notes may be callable and can be redeemed at the option of the issuer or holder. Most retail notes also feature a survivor's option. Also known as "retail bonds". |||Retail notes may qualify for tax-deferred status on their own. They are also eligible IRA investments. In addition to purchasing them from the issuer, you can also purchase them from a financial intermediary such as a broker.
A type of inverse floating-rate bond created by dividing the income from a municipal bond into two portions. The municipal bondholder will create two new securities: a primary direct floating-rate bond and a residual inverse floating-rate bond. The floaters will be linked to a reference interest rate, such as LIBOR, and the municipal bond's income will be used to pay the coupon on the direct floater, with any remaining income going toward the residual interest bond. |||Because the residual interest bond is an inverse floater and only pays a residual income, its price will be highly sensitive to changes in interest rates. As market interest rates increase, investors can expect to see large decreases in the value of a residual interest bond.
A type of security whose cash flows come from residential debt such as mortgages, home-equity loans and subprime mortgages. This is a type of mortgage-backed securities that focuses on residential instead of commercial debt. |||Holders of an RMBS receive interest and principal payments that come from the holders of the residential debt. The RMBS comprises a large amount of pooled residential mortgages.
The rate at which cash flows from fixed-income securities may be reinvested. |||Because of the additional interest income, bondholders can make larger investment returns if they reinvest received coupon payments.
登录
工商服务
危机公关
金融律师
app开发
财税服务
金融牌照
网站建设
知识产权
企业征信
审计评估