ACT Association of Corporate Treasurers. ACT website Administration Administration is a procedure under the Insolvency Act 1986 under which a company in financial...
Back office Administrative departments in a bank which are involved in activities such as settlement and accounts Back to back transaction A transaction that has a mirror...
Capitalisation of interest Where interest is added to the principal amount of a loan to be paid at the same time as the principal. This contrasts with cash interest which...
Debt pushdown Where debt held by a holding company is repaid by the holding company and re-borrowed by a subsidiary (normally this is notional and done through accounting...
EBITDA Earnings before interest, tax, depreciation and amortisation. The EBITDA of the business forms part of certain financial covenant ratios and is used to calculate...
Face value The nominal value of a security rather than its market value Facility agent The financial institution that acts as administrative agent for the syndicate in a...
Gearing A term which indicates the debt to equity ratio of a company Gilts Securities issued by the British government Grace period The period of time given to a borrower...
Haircut A term referring to the reduction in value of an asset or the cash flow received from it. This is usually expressed in percentage terms. Hedge counterparty A...
IBA This refers to ICE Benchmarks Administration Ltd, the administrator of LIBOR IBOR ‘IBORs’ are benchmarks based on Interbank Offered Rates (ie the rate at which one...
Junior debt Debt that is subordinated to or otherwise ranks behind senior debt Lexis®PSL resources Intercreditor agreement—parties and structures
Key person One or more persons designated by lenders/investors as key to a business. Contractual provisions within the documentation may specify the required degree of...
Lag mechanism This is a mechanism for calculating compounded SONIA for use in bond or loan markets. It is intended to provide a little visibility to borrowers or issuers...
Maintenance covenant Type of covenant which is tested on a regular basis; contrasts with an incurrence covenant where compliance is only tested when the borrower wishes...
Naked credit default swap A credit default swap which is purely speculative and on which neither party owns the reference entity Net asset value The value of an entity’s...
OECD The Organisation for Economic Cooperation and Development, an association of industrialised economies which provides inter alia economic research and policy...
Par The face value of a security at which it will be redeemed by the borrower at maturity Pari passu Literally means on an equal basis. The pari passu principle dictates...
Quasi-equity Equity that is invested in the form of subordinated loan capital or preference shares Lexis®PSL resources Sources of finance for leveraged buy-outs...
Rating The assessment given to debt obligations and/or to borrowers by debt rating agencies based on their ability to repay their debts Rating agency A company...
Sale and leaseback A transaction where the seller sells real property to the purchaser who then leases it back to the seller Lexis®PSL resources Sale and leaseback SARON...
Tangible assets Assets with physical substance, eg land, cash or property Target A company or business that is the subject of a proposed acquisition Lexis®PSL resources...
UCITs UCITS stands for 'undertakings for collective investment in transferable securities'. The term originates from Directive 85/611/EEC on the coordination of laws,...
Warrant A tradeable security which gives the holder the right, but not the obligation, to buy or sell a specified asset at a specified price on a specified date or dates....
Yank the bank A provision in a facility agreement enabling the borrower to replace a lender if it fails to agree to a borrower request for a consent, amendment or waiver...
Zero coupon bond/note A non-interest bearing debt security which is issued at a discount to its face value.