BCM Vocabulary

A hundreth of a percent.

E.g. 0.25% = 25 basis points

Debt security, title to which depends on possession and not an entry in a register maintained by the issuer

A provision in an overdraft required the borrower to reduce or clear the overdraft and/or revolving credit facility for a number of consecutive days a month, so that the facility is used only to manage cashflow and not as a permanent source of finance.

A short term debt security of less than a year (usually 90 days duration)

A debt securitythat gives the holder the right to exchange it for shares in the issuer

The colloquial term for the rate of interest payable on a debt security

The point at which the borrower accesses some or all of the money it is borrowing

Generic term for the debt securities market, because the majority of instruments pay a fixed rate of interest over their life

An agreement that creates a stand-alone primary obligation - unlike a guarantee.

A form of comfort letter

London inter-bank offered rate.

This is that rate at which banks lend to one another

The way in which a bank fund the loans it makes by borrowing on the inter-bank market

A term that prohibits a borrower from granting security to third parties.

Synonymous with 'bond'. i.e. a debt security

Market terms for a country which borrows in the intenrational capital markets (e.g. UK or Sweden)

A facility that enables an issuer to repay commercial paper it is unable to rollover

Slice - usually applies to borrowings where the borrowing or repayment is in instalments

Basis on which annual interest will be apportioned.

• In UK - 365
• IN US - 360

Divide by day count fraction and multiple by number of days borrowed.

Usually 11am in London

Overdraft.

• - Repayable on demand
• - Often contains a clean down provision

Loan of specific sum provided for a specific period of time.

• - Usually for a specific purpose
• - Committed

Term loan provided by one bank to the borrower

- Limited amount that can be lent

Loan by more than one bank to the borrower.

When participants in a syndicated loan sell their committment in the loan

Funds can be drawn when needed (like an overdraft) but funds at committed(like a loan)

Very short term (7-10 days) credit facility

Loan

Borrower and lender

Issuer (borrower) and investor (lender)

Working capital facilities - which fund companies' cashflow gaps - are either overdrafts or revolving credit facilities.

All kinds of bonds such as bonds, loan stock, certificates of deposit, commercial paper.

NOT shares or loans