Banking & Finance Glossary—C
Banking & Finance Glossary—C

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • Banking & Finance Glossary—C
  • Capitalisation of interest
  • Lexis®PSL resources
  • CDO
  • Certain funds
  • Lexis®PSL resources
  • Certificate of deposit (CD)
  • Chapter 11
  • Lexis®PSL resources
  • Charge
  • More...

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 is paid by the borrower at regular intervals throughout the life of the loan.

Lexis®PSL resources

Interest—funding rates and margin

CDO

Collateralised debt obligation—a type of security issued by an SPV and secured on a portfolio of loans, bonds or other debt securities

Certain funds

Financing that is available to a borrower with no conditions or with limited conditions. Under the Takeover Code, certain funds are required for an acquisition of a public company. It is common for lenders on acquisition finance transactions to lend on a certain funds basis, even where the target is a private company.

Lexis®PSL resources

Acquisition finance—facilities agreement: overview — Utilising, repaying and prepaying the facilities

Certificate of deposit (CD)

A negotiable bearer instrument which is evidence of a fixed term deposit with a bank and which either bears interest (at a fixed or variable rate) or is issued at a discount. CDs are commonly issued with maturities between one month and five years.

The advantage for the bank is that CDs are a simple and flexible way of obtaining fixed term funding from both retail and institutional investors. Documentation and administration costs are minimal.

The advantage for investors is that, as a fixed term deposit, a CD will generally bear

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