Definition of Private Export Funding Corporation (PEFCO)

Private Export Funding Corporation (PEFCO)

Company that mobilizes private capital for financing the
export of big-ticket items by U.S. firms by purchasing at fixed interest rates the medium- to long-term debt
obligations of importers of U.S. products.

Articles of incorporation

Legal document establishing a corporation and its structure and purpose.

Controlled foreign corporation (CFC)

A foreign corporation whose voting stock is more than 50% owned
by U.S. stockholders, each of whom owns at least 10% of the voting power.

Corporation

A legal "person" that is separate and distinct from its owners. A corporation is allowed to own
assets, incur liabilities, and sell securities, among other things.

Domestic International Sales Corporation (DISC)

A U.S. corporation that receives a tax incentive for
export activities.

Edge corporations

Specialized banking institutions, authorized and chartered by the Federal Reserve Board
in the U.S., which are allowed to engage in transactions that have a foreign or international character. They
are not subject to any restrictions on interstate banking. Foreign banks operating in the U.S. are permitted to
organize and own and Edge corporation.

Export-Import Bank (Ex-Im Bank)

The U.S. federal government agency that extends trade credits to U.S.
companies to facilitate the financing of U.S. exports.

Federal Deposit Insurance Corporation (FDIC)

A federal institution that insures bank deposits.

Foreign Sales Corporation (FSC)

A special type of corporation created by the Tax Reform Act of 1984 that
is designed to provide a tax incentive for exporting U.S.-produced goods.

Freddie Mac (Federal Home Loan Mortgage Corporation)

A Congressionally chartered corporation that
purchases residential mortgages in the secondary market from S&Ls, banks, and mortgage bankers and
securitizes these mortgages for sale into the capital markets.

Funding ratio

The ratio of a pension plan's assets to its liabilities.

Funding risk

Related: interest rate risk

Going-private transactions

Publicly owned stock in a firm is replaced with complete equity ownership by a
private group. The shares are delisted from stock exchanges and can no longer be purchased in the open
markets.

High-coupon bond refunding

Refunding of a high-coupon bond with a new, lower coupon bond.

Liability funding strategies

Investment strategies that select assets so that cash flows will equal or exceed
the client's obligations.

Low-coupon bond refunding

Refunding of a low coupon bond with a new, higher coupon bond.

Mortgage-Backed Securities Clearing Corporation

A wholly owned subsidiary of the Midwest Stock
Exchange that operates a clearing service for the comparison, netting, and margining of agency-guaranteed
MBSs transacted for forward delivery.

Multinational corporation

A firm that operates in more than one country.

Net advantage of refunding

The net present value of the savings from a refunding.

OPEC (Organization of Petroleum Exporting Countries)

A cartel of oil-producing countries.

Pension Benefit Guaranty Corporation (PBGC)

A federal agency that insures the vested benefits of
pension plan participants (established in 1974 by the ERISA legislation).

Possessions corporation

A type of corporation permitted under the U.S. tax code whereby a branch operation
in a U.S. possessions can obtain tax benefits as though it were operating as a foreign subsidiary.

Private-label pass-throughs

Related: Conventional pass-throughs.

Private placement

The sale of a bond or other security directly to a limited number of investors.

Private unrequited transfers

Refers to resident immigrant workers' remittances to their country of origin as
well as gifts, dowries, inheritances, prizes, charitable contributions, etc.

Refunding

The redemption of a bond with proceeds received from issuing lower-cost debt obligations
ranking equal to or superior to the debt to be redeemed.

Stopping curve refunding rate

A refunding rate that falls on the stopping curve.

Corporation

A legal entity, organized under state laws, whose investors purchase
shares of stock as evidence of ownership in it. A corporation is a legal entity, which
eliminates much of the liability for the corporation’s actions from its investors.

Privately held

A company that is entirely owned by a small number of people; further, its shares are not publicly traded.

corporation

Business owned by stockholders who are not personally
liable for the business’s liabilities.

private placement

Sale of securities to a limited number of investors without a public offering.

Export

Domestically produced good or service sold to foreigners.

Net Exports

exports minus imports.

Private Saving

That part of disposable income not spent on consumption.

Preferred Stock Stock that has a claim on assets and dividends of a corporation that are prior

to that of common stock. Preferred stock typically does not carry the right to vote.

Canadian Deposit Insurance Corporation

Better known as CDIC, this is an organization which insures qualifying deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of deposits are not insured, such as mortgage-backed deposits, annuities of duration of more than five years, and mutual funds.

Export Credit Insurance

The granting of insurance to cover the commercial and political risks of selling in foreign markets.

Export Financing

A range of financing products (loans. guarantees, letters of credit, insurance etc.) in support of a variety of activities which help Canadian firms expand into new export markets.

Funding Costs

The price of obtaining capital, either borrowed or equity, with intent to carry on business operations.

Incorporation

Process by which a company receives its Articles of Incorporation allowing it to operate as a corporation.

Private Placement

Sale of stocks, bonds or other investments directly to an institutional investor or individuals. Prior registration with the regulatory authorities is not required if the securities are purchased for investment as opposed to resale.

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