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Cov-lite
Cov-lite (or "covenant light") is financial jargon for loan agreements that do not contain the usual protective covenants for the benefit of the lending party. Although traditionally banks have insisted on a wide range of covenants that allow them to intervene if the financial position of the borrower or the value of underlying assets deteriorates, around 2006 the increasing strength of private equity firms and the decreasing opportunities for traditional corporate loans made by banks fueled something of a "race to the bottom", with syndicates of banks competing with each other to offer ever less invasive terms to borrowers in relation to leveraged buy-outs. During the 2008 financial crisis, growth in the use of cov-lite loans stalled, but more recently they have increased in popularity again. Cov-lite lending is seen as riskier because it removes the early warning signs lenders would otherwise receive through traditional covenants. Against this, it has been countered that cov-l ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Corporate Debt Bubble
The corporate debt bubble is the large increase in corporate bonds, excluding that of financial institutions, following the 2008 financial crisis. Global corporate debt rose from 84% of gross world product in 2009 to 92% in 2019, or about $72 trillion. In the world's eight largest economies—the United States, China, Japan, the United Kingdom, France, Spain, Italy, and Germany—total corporate debt was about $51 trillion in 2019, compared to $34 trillion in 2009. Excluding debt held by financial institutions—which trade debt as mortgages, student loans, and other instruments—the debt owed by non-financial companies in early March 2020 was $13 trillion worldwide, of which about $9.6 trillion was in the U.S. The corporate bond market historically centered in the United States. The U.S. Federal Reserve noted in November 2019 that leveraged loans, corporate bonds made to companies with poor credit histories or large amounts of existing debt, were the fastest growing asset cla ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Syndicated Loan
A syndicated loan is one that is provided by a group of lenders and is structured, arranged, and administered by one or several commercial banks or investment banks known as lead arrangers. The syndicated loan market is the dominant way for large corporations in the U.S. and Europe to receive loans from banks and other institutional financial capital providers. Financial law often regulates the industry. The U.S. market originated with the large leveraged buyout loans of the mid-1980s, and Europe's market blossomed with the launch of the euro in 1999. At the most basic level, arrangers serve the investment-banking role of raising investor funding for a business in need of capital. In this context the business is often referred to as an “issuer”, because in return for the loan it issues debentures (which are generally secured and transferable). The issuer pays the arranger a fee for arranging the deal. Fees increase with the complexity and risk of the loan: the most remun ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Jargon
Jargon, or technical language, is the specialized terminology associated with a particular field or area of activity. Jargon is normally employed in a particular Context (language use), communicative context and may not be well understood outside that context. The context is usually a particular occupation (that is, a certain trade, profession, vernacular or academic field), but any ingroups and outgroups, ingroup can have jargon. The key characteristic that distinguishes jargon from the rest of a language is its specialized vocabulary, which includes terms and definitions of words that are unique to the context, and terms used in a narrower and more exact sense than when used in colloquial language. This can lead In-group and out-group, outgroups to misunderstand communication attempts. Jargon is sometimes understood as a form of technical slang and then distinguished from the official terminology used in a particular field of activity. The terms ''jargon'', ''slang,'' and ''argot ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Financial Times
The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and also published digitally that focuses on business and economic Current affairs (news format), current affairs. Based in London, the paper is owned by a Japanese holding company, Nikkei, Inc., Nikkei, with core editorial offices across Britain, the United States and continental Europe. In July 2015, Pearson plc, Pearson sold the publication to Nikkei for Pound sterling, £844 million (US$1.32 billion) after owning it since 1957. In 2019, it reported one million paying subscriptions, three-quarters of which were digital subscriptions. In 2023, it was reported to have 1.3 million subscribers of which 1.2 million were digital. The newspaper has a prominent focus on Business journalism, financial journalism and economic analysis rather than News media, generalist reporting, drawing both criticism and acclaim. It sponsors an Financial Times and McKinsey Business Book of the Year Award, annual book ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Loans
In finance, a loan is the tender of money by one party to another with an agreement to pay it back. The recipient, or borrower, incurs a debt and is usually required to pay interest for the use of the money. The document evidencing the debt (e.g., a promissory note) will normally specify, among other things, the principal amount of money borrowed, the interest rate the lender is charging, and the date of repayment. A loan entails the reallocation of the subject asset(s) for a period of time, between the lender and the borrower. The interest provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants. Although this article focuses on monetary loans, in practice, any material object might be lent. Acting as a provider of loans is one of the main activities of financial institutions such as banks and cred ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Corporate Bonds
A corporate bond is a bond issued by a corporation in order to raise financing for a variety of reasons such as to ongoing operations, mergers & acquisitions, or to expand business. It is a longer-term debt instrument indicating that a corporation has borrowed a certain amount of money and promises to repay it in the future under specific terms. Corporate debt instruments with maturity shorter than one year are referred to as commercial paper. Definition A corporate bond is a bond issued by a corporation in order to raise financing for a variety of reasons such as to ongoing operations, mergers & acquisitions, or to expand business. The term sometimes also encompasses bonds issued by supranational organizations (such as European Bank for Reconstruction and Development). Strictly speaking, however, it only applies to those issued by corporations. The bonds of local authorities (municipal bonds) are not included. Trading Corporate bonds trade in decentralized, dealer-bas ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Credit Crunch
A credit crunch (a credit squeeze, credit tightening or credit crisis) is a sudden reduction in the general availability of loans (or credit) or a sudden tightening of the conditions required to obtain a loan from banks. A credit crunch generally involves a reduction in the availability of credit independent of a rise in official interest rates. In such situations the relationship between credit availability and interest rates changes. Credit becomes less available at any given official interest rate, or there ceases to be a clear relationship between interest rates and credit availability (i.e. credit rationing occurs). Many times, a credit crunch is accompanied by a flight to quality by lenders and investors, as they seek less risky investments (often at the expense of small to medium size enterprises). Causes A credit crunch is often caused by a sustained period of careless and inappropriate lending which results in losses for lending institutions and investors in debt when th ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Subprime Mortgage Crisis
The American subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010, contributing to the 2008 financial crisis. It led to a severe economic recession, with millions becoming unemployed and many businesses going bankrupt. The U.S. government intervened with a series of measures to stabilize the financial system, including the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act (ARRA). The collapse of the United States housing bubble and high interest rates led to unprecedented numbers of borrowers missing mortgage repayments and becoming delinquent. This ultimately led to mass foreclosures and the devaluation of housing-related securities. The housing bubble preceding the crisis was financed with mortgage-backed securities (MBSes) and collateralized debt obligations (CDOs), which initially offered higher interest rates (i.e. better returns) than government securities, along with attractive risk ratin ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
First Data
First Data Corporation was a financial services company headquartered in Atlanta, Georgia, United States. The company's STAR Network provides nationwide domestic debit acceptance at more than 2 million retail POS, ATM, and at online outlets for nearly a third of all U.S. debit cards. First Data has six million merchants, the largest in the payments industry. The company handles 45% of all US credit and debit transactions, including handling prepaid gift card processing for many US brands such as Starbucks. It processes around 2,800 transactions per second and $2.2 trillion in card transactions annually, with an 80% market share in gas and groceries in 2014. First Data's SpendTrend Report is frequently used by national news networks such as '' WSJ, USA Today'', ''ESPN'', ''The New York Times'', Vox Media, and ''Bloomberg''. On January 16, 2019, Fiserv announced a deal to acquire First Data in an all-stock deal with equity value of $22 billion. Fiserv completed the acquisition ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Kohlberg Kravis Roberts
KKR & Co. Inc., also known as Kohlberg Kravis Roberts & Co., is an American global private-equity and investment company. , the firm had completed private-equity investments in portfolio companies with approximately $710 billion of total enterprise value. Its assets under management (AUM) and fee paying assets under management (FPAUM) were $553 billion and $446 billion, respectively. KKR was founded in 1976 by Jerome Kohlberg Jr., and cousins Henry Kravis and George R. Roberts, all of whom had previously worked together at Bear Stearns, where they completed some of the earliest leveraged buyout transactions. Since its founding, KKR has completed a number of transactions, including the 1989 leveraged buyout of RJR Nabisco, which was the largest buyout in history to that point, as well as the 2007 buyout of TXU, which is currently the largest buyout completed to date. [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bond (finance)
In finance, a bond is a type of Security (finance), security under which the issuer (debtor) owes the holder (creditor) a debt, and is obliged – depending on the terms – to provide cash flow to the creditor (e.g. repay the principal (i.e. amount borrowed) of the bond at the Maturity (finance), maturity date and interest (called the coupon (bond), coupon) over a specified amount of time.) The timing and the amount of cash flow provided varies, depending on the economic value that is emphasized upon, thus giving rise to different types of bonds. The interest is usually payable at fixed intervals: semiannual, annual, and less often at other periods. Thus, a bond is a form of loan or IOU. Bonds provide the borrower with external funds to finance long-term investments or, in the case of government bonds, to finance current expenditure. Bonds and Share capital, stocks are both Security (finance), securities, but the major difference between the two is that (capital) stockholders h ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Collateralized Debt Obligation
A collateralized debt obligation (CDO) is a type of structured finance, structured asset-backed security (ABS). Originally developed as instruments for the corporate debt markets, after 2002 CDOs became vehicles for refinancing Mortgage-backed security, mortgage-backed securities (MBS).Lepke, Lins and Pi card, ''Mortgage-Backed Securities'', §5:15 (Thomson West, 2014). Like other private label securities backed by assets, a CDO can be thought of as a promise to pay investors in a prescribed sequence, based on the cash flow the CDO collects from the pool of bonds or other assets it owns. Distinctively, CDO credit risk is typically assessed based on a probability of default (PD) derived from ratings on those bonds or assets. The CDO is "sliced" into sections known as tranche, "tranches", which "catch" the cash flow of interest and principal payments in sequence based on seniority. If some loans default and the cash collected by the CDO is insufficient to pay all of its investors, t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
