Financial Terms | |
Borrow |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
Main Page: payroll, business, money, financial advisor, accounting, finance, credit, stock trading, |
Definition of BorrowBorrowTo obtain or receive money on loan with the promise or understanding that it will be repaid.
Related Terms:Borrower falloutIn the mortgage pipeline, the risk that prospective borrowers of loans committed to be Limitation on subsidiary borrowingA bond covenant that restricts in some way a firm's ability to borrow at co-borrowerA co-borrower is the secondary borrower on a borrowing account. The primary borrower will receive mailed monthly statements while the co-borrower has the option to choose whether or not he/she will also receive statements. Borrower (Credit Insurance)A consumer who borrows money from a lender. Additional hedgeA protection against borrower fallout risk in the mortgage pipeline. Asset-coverage testA bond indenture restriction that permits additional borrowing on if the ratio of assets to Asset for asset swapCreditors exchange the debt of one defaulting borrower for the debt of another Back-to-back loanA loan in which two companies in separate countries borrow each other's currency for a Blanket inventory lienA secured loan that gives the lender a lien against all the borrower's inventories. Buy on marginA transaction in which an investor borrows to buy additional shares, using the shares BuydownsMortgages in which monthly payments consist of principal and interest, with portions of these BuyoutPurchase of a controlling interest (or percent of shares) of a company's stock. A leveraged buy-out is CollateralAssets than can be repossessed if a borrower defaults. Conventional mortgageA loan based on the credit of the borrower and on the collateral for the mortgage. Cost of fundsInterest rate associated with borrowing money. Credit riskThe risk that an issuer of debt securities or a borrower may default on his obligations, or that the Dealer loanOvernight, collateralized loan made to a dealer financing his position by borrowing from a DebtMoney borrowed. Debt capacityAbility to borrow. The amount a firm can borrow up to the point where the firm value no Debt displacementThe amount of borrowing that leasing displaces. Firms that do a lot of leasing will be Debt leverageThe amplification of the return earned on equity when an investment or firm is financed DefeasancePractice whereby the borrower sets aside cash or bonds sufficient to service the borrower's debt. Demand line of creditA bank line of credit that enables a customer to borrow on a daily or on-demand basis. Discount rateThe interest rate that the Federal Reserve charges a bank to borrow funds when a bank is Discount windowFacility provided by the Fed enabling member banks to borrow reserves against collateral Documented discount notesCommercial paper backed by normal bank lines plus a letter of credit from a Either/or facilityAn agreement permitting a bank customer to borrow either domestic dollars from the EurocreditsIntermediate-term loans of Eurocurrencies made by banking syndicates to corporate and Eurocurrency marketThe money market for borrowing and lending currencies that are held in the form of External financeFinance that is not generated by the firm: new borrowing or a stock issue. Fallout riskA type of mortgage pipeline risk that is generally created when the terms of the loan to be Federal Financing BankA federal institution that lends to a wide array of federal credit agencies funds it Federal funds marketThe market where banks can borrow or lend reserves, allowing banks temporarily Financial intermediariesInstitutions that provide the market function of matching borrowers and lenders or Fiscal agency agreementAn alternative to a bond trust deed. Unlike the trustee, the fiscal agent acts as an Fixed-rate loanA loan on which the rate paid by the borrower is fixed for the life of the loan. Forward rate agreement (FRA)Agreement to borrow or lend at a specified future date at an interest rate Free reservesExcess reserves minus member bank borrowings at the Fed. FrictionsThe "stickiness" in making transactions; the total hassle including time, effort, money, and tax Government sponsored enterprisesPrivately owned, publicly chartered entities, such as the Student Loan Graduated-payment mortgages (GPMs)A type of stepped-payment loan in which the borrower's payments Homemade leverageIdea that as long as individuals borrow (or lend) on the same terms as the firm, they can IndentureAgreement between lender and borrower which details specific terms of the bond issuance. InterestThe price paid for borrowing money. It is expressed as a percentage rate over a period of time and Investor falloutIn the mortgage pipeline, risk that occurs when the originator commits loan terms to the Leveraged leaseA lease arrangement under which the lessor borrows a large proportion of the funds needed Leveraged portfolioA portfolio that includes risky assets purchased with funds borrowed. LIBORThe London Interbank Offered Rate; the rate of interest that major international banks in London Line of credit An informal arrangement between a bank and a customer establishing a maximum loan Loan valueThe amount a policyholder may borrow against a whole life insurance policy at the interest rate Leveraged portfolioA portfolio that includes risky assets purchased with funds borrowed. Line of creditAn informal arrangement between a bank and a customer establishing a maximum loan MarginThis allows investors to buy securities by borrowing money from a broker. The margin is the Market clearingTotal demand for loans by borrowers equals total supply of loans from lenders. The market, Money marketMoney markets are for borrowing and lending money for three years or less. The securities in Money market hedgeThe use of borrowing and lending transactions in foreign currencies to lock in the MortgageA loan secured by the collateral of some specified real estate property which obliges the borrower Mortgage pipelineThe period from the taking of applications from prospective mortgage borrowers to the Mortgage-pipeline riskThe risk associated with taking applications from prospective mortgage borrowers MortgagerThe borrower of a loan secured by property. Multicurrency clauseSuch a clause on a Euro loan permits the borrower to switch from one currency to Multicurrency loansGive the borrower the possibility of drawing a loan in different currencies. Negative pledge clauseA bond covenant that requires the borrower to grant lenders a lien equivalent to any Net advantage to leasingThe net present value of entering into a lease financing arrangement rather than Note issuance facility (NIF)An agreement by which a syndicate of banks indicates a willingness to accept Open repoA repo with no definite term. The agreement is made on a day-to-day basis and either the Parallel loanA process whereby two companies in different countries borrow each other's currency for a Pay-upThe loss of cash resulting from a swap into higher price bonds or the need/willingness of a bank or Perfectly competitive financial marketsMarkets in which no trader has the power to change the price of Perfected first lienA first lien that is duly recorded with the cognizant governmental body so that the lender Price riskThe risk that the value of a security (or a portfolio) will decline in the future. Or, a type of Prime rateThe interest rate at which banks lend to their best (prime) customers. Much more often than not, a Principal1) The total amount of money being borrowed or lent. Principal amountThe face amount of debt; the amount borrowed or lent. Often called principal. Regulation DFed regulation currently that required member banks to hold reserves against their net Regulation MFed regulation currently requiring member banks to hold reserves against their net borrowings Restrictive covenantsProvisions that place constraints on the operations of borrowers, such as restrictions on Reverse price riskA type of mortgage-pipeline risk that occurs when a lender commits to sell loans to an Samurai bondA yen-denominated bond issued in Tokyo by a non-Japanese borrower. Related: bulldog Selling shortIf an investor thinks the price of a stock is going down, the investor could borrow the stock from Short interestThis is the total number of shares of a security that investors have borrowed, then sold in the Short positionOccurs when a person sells stocks he or she does not yet own. Shares must be borrowed, Spot lendingThe origination of mortgages by processing applications taken directly from prospective borrowers. Spread1) The gap between bid and ask prices of a stock or other security. Subordination clauseA provision in a bond indenture that restricts the issuer's future borrowing by Substitute saleA method for hedging price risk that utilizes debt-market instruments, such as interest rate Swingline facilityBank borrowing facility to provide finance while the firm replaces U.S. commercial paper SwitchingLiquidating an existing position and simultaneously reinstating a position in another futures Symmetric cash matchingAn extension of cash flow matching that allows for the short-term borrowing of Term to maturityThe time remaining on a bond's life, or the date on which the debt will cease to exist and Trading costsCosts of buying and selling marketable securities and borrowing. Trading costs include Trust deedAgreement between trustee and borrower setting out terms of bond. Whole life insuranceA contract with both insurance and investment components: (1) It pays off a stated WorkoutInformal arrangement between a borrower and creditors. BONDA long-term, interest-bearing promissory note that companies may use to borrow money for periods of time such as five, ten, or twenty years. Debtborrowings from financiers. InterestThe cost of money, received on investments or paid on borrowings. amortizationThis term has two quite different meanings. First, it may capitalA very broad term rooted in economic theory and referring to Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |