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- 1
- An operating lease in which the lessee has the right to buy the leased asset at the end of the lease term for 10% of the original purchase price.[...]
- An operating lease that requires the lessee to purchase the equipment for 10% of its original purchase price, it being an obligation of the lessee rat[...]
- 2
- A
- Abbreviation for account receivable
- Abbreviation for asset-backed security
- Horizontal analysis that compares the absolute currency amounts of items over two or more time periods.[...]
- A rule invoked by a bankruptcy court during the liquidation of the assets of a business, especially when the business files a bankruptcy petition that[...]
- Variation of accelerated amortization
- An amortization method that allocates and expenses the cost of an intangible or financial asset in decreasing amounts in each accounting period over t[...]
- A depreciation method that allocates and expenses the cost of a tangible fixed asset in decreasing amounts in each succeeding accounting period over t[...]
- The act of receiving an asset from its supplier whereby the lessee uses a certificate of acceptance to acknowledge that the asset it received is prope[...]
- A current liability arising from the purchase of goods and/or services on open account in the ordinary course of business, the balance on balance shee[...]
- 1. A current liability arising from the purchase of goods and/or services on open account in the ordinary course of business, the balance on balance s[...]
- A current asset arising from the sale of goods and/or the rendering of services on open account in the ordinary course of business, the balance on bal[...]
- The periodic allocation of the cost of a tangible asset over its estimated economic life and reduction of the asset’s carrying value in accordance w[...]
- A distinct business unit or other organization for which accounting records are kept and financial statements are prepared.[...]
- The period of time during which financial transactions and events have occurred, are recognized and for which financial statements are prepared, most [...]
- The standards and practices applied in financial reporting, telling accountants what items to measure and when and how to measure them.[...]
- A ratio indicating how a company is using its suppliers as a source of working capital: Accounts Payables ÷ Net Sales.[...]
- An asset representing a claim to previously unrecorded revenue that has been earned but not yet due for payment as of balance sheet date – until a f[...]
- The interest that accumulates on the principal amount of a bond or other debt instrument after the debt’s last interest payment, the amount being ea[...]
- An obligation incurred in the current accounting period but not due for payment until after the end of the period, usually payable within the followin[...]
- The total amount of economic usefulness that has expired and been expensed (depreciated) since the asset’s acquisition; it is an contra asset accoun[...]
- A separate line item in shareholders' equity that reports the accounting entity's cumulative income that has not been reported as part of net income i[...]
- Abbreviation for aircraft, crew, maintenance and insurance
- An entity that offers to acquire control of another company (target company) by paying cash, shares and/or debt instruments for the acquiree.[...]
- A corporate transaction in which one company (acquirer) obtains control (usually more than 50% of the voting rights) of another company (target compan[...]
- Any action that subjects an individual or entity to be proceeded against involuntarily as a bankrupt or for which the person could be adjudged bankrup[...]
- Any ratio that measures the relationship between a firm’s level of operations, usually stated in terms of sales (turnover), and the assets needed to[...]
- The intentional action to defraud creditors.[...]
- Any company that becomes a “Borrower” subsequent to the execution of the facility agreement.[...]
- An “Additional Borrower” or an “Additional Guarantor”.[...]
- An insolvency procedure in which an administrator is appointed to restructure a financially distressed firm in order for it to continue as a going con[...]
- An up-front fee the leasing company charges the lessee for lease-related administration costs.[...]
- An expense incurred in the administration of the firm as a whole, which include the salaries of top management, general office expenses and legal expe[...]
- A licensed insolvency practitioner – individual or entity – appointed by and accountable to the court, tribunal or agency with jurisdiction over i[...]
- The amount of credit extended to a borrower in a single drawing, the term generally being used in loan documentation to identify the different portion[...]
- A parent or a subsidiary of the parent, which are presented together as one entity in the consolidated financial statements of the parent company.[...]
- Abbreviation for available-for-sale
- The bank or other financial institution that is responsible for administering a syndicate facility and acting as a conduit for all payments over the t[...]
- Variation of lead arranger
- Abbreviation for accrued interest
- A certificate granted by a national aviation authority (NAA) authorizing an aircraft operator to use aircraft for specified commercial purposes.[...]
- Variation of wet lease
- Abbreviation for allowance for loan and lease losses
- The amount of a facility assigned to each participant lender upon the close of general syndication, marking the final step in syndication.[...]
- The date on which participant lenders are notified of allocations, in a manner determined by bookrunner(s), and the syndication closing timetable is c[...]
- An asset contra account representing the possibility that some receivables will not be collected during the coming accounting period.[...]
- The asset-contra asset reported on the balance sheet showing the accumulated estimated amounts of impaired financial assets that will not be collected[...]
- The method of accounting for doubtful accounts that estimates the uncollectibles at the end of the period, based on past experience and forecasts of f[...]
- Abbreviation for asset-liability management
- The three senior secured term loans – “Facility A”, “Facility B” and “Facility C” – anticipated in LMA template leveraged agreements, [...]
- A system for taxing individuals and corporations that effectively prevents taxpayers from reducing their tax below a certain level, where the taxpayer[...]
- A change or revision, usually to the wording of a written document, where loan agreement call for either majority or unanimous lender consent.[...]
- Variation of amortization
- Variation of amortization schedule
- Variation of amortized cost
- 1. The reduction of a limited-life asset’s value as a result of the passage of time or its use in the production of goods and services through the a[...]
- A table in a lease agreement that sets forth the leased asset's purchase value, the lease value, the monthly installments, repayment dates, lease fees[...]
- The amount at which a financial instrument is measured upon initial recognition, equal to its transaction price minus the principal repayments, plus o[...]
- Abbreviation for alternative minimum tax
- A fee-based service provided by banks, including cash management, payment and collection services, risk-management services, foreign exchange and M&A [...]
- A separate facility in a structured financing that provides additional financing or hedging, including an overdraft facility, a guarantee, bonding, do[...]
- A lender or affiliate of the lender that makes an ancillary facility available to the borrower on a bilateral basis, out of the lender's revolving com[...]
- 1. The annualized nominal rate without intraperiod compounding, equal to the periodic nominal rate times the number of compounding periods for a year.[...]
- Abbreviation for air operator certificate
- Abbreviation for accounting period
- Abbreviation for Asia Pacific Loan Market Association
- A combined lease and credit application process in which a lessor reviews and grants credit using the information submitted on leasing applications, a[...]
- An up-front fee charged for the processing of a lease application.[...]
- The document filed with the competent authority by the debtor, creditors or a government authority to initiate insolvency proceedings.[...]
- An amount of retained earnings in the balance sheet that is segregated for a specific purpose and reported separately to inform shareholders of the am[...]
- Abbreviation for annual percentage rate
- An upfront fee paid by a borrower to lead arrangers for originating the financing, structuring the syndicate and distributing the financing facility, [...]
- 1. An underwriter of a finance transaction, acting alone or as co-underwriter. 2. A largely ceremonial title awarded to a syndicate's participant len[...]
- The group of commercial or investment banks that comes together in the primary syndication and commits to provide the funds required by the borrower.[...]
- Abbreviation for FASB Accounting Standards Codification
- The primary source of guidance issued by the US Financial Accounting Standards Board (FASB) on the accounting for leases by lessors and lessees, which[...]
- The leasing accounting standard issued by the US Financial Accounting Standards Board (FASB) and effective as of 15 December 2018 that requires public[...]
- A trade association active in the in the Asia Pacific region with the stated mission to increase liquidity, efficiency and transparency in the primary[...]
- Any right or physical object that provides an entity with probable future economic benefit (value) expressed in terms of money that has been obtained [...]
- An account that changes the carrying value of the asset to which it relates, including accumulated depreciation and allowance account for loan and lea[...]
- The creation and issuance of marketable debt securities either through true-sale securitization or synthetic securitization.[...]
- A marketable security that is issued by a special purpose vehicle (SPV) that buys financial receivables, such as automotive leases and consumer loans,[...]
- The coordinated management of the interest rate, liquidity and market-price risks inherent in a financial institution for the general purpose of earni[...]
- The LMA term used for the assignment of rent where property is located in Scotland.[...]
- A lease assigned by the lessor (assignor) to a funding source (assignee) in exchange for an upfront cash funds.[...]
- The party to whom rights in a contractual arrangement and/or an asset have been transferred and assigned.[...]
- The sale of a financing arrangement (e.g., a loan or lease) in which the rights to payments (not any obligations) of the financing are transferred to [...]
- 1. [US] The transfer of the rights and obligations of the assignor/seller under a credit agreement, such that the assignee/buyer comes into privity of[...]
- The document used to assign and transfer an LMA facility.[...]
- LSTA documentation generally used for assignments, generally attached to each credit agreement.[...]
- LMA distressed documentation that involves an LMA Trade Confirmation, an Assignment Agreement and a Pricing Letter.[...]
- LSTA distressed documentation involves a Purchase and Sale Agreement (PSA), an Assignment and Acceptance Agreement (A&A) and a Purchase Price Letter.[...]
- The party that transfers and assigns some or all of its rights in a contractual arrangement and/or an asset to another party to secure the funding pro[...]
- An entity over which an investor has significant influence, generally through control of more than 20% and less than 50% of the company’s voting rig[...]
- A perfected lien, which makes the security interest in property complete and legally enforceable as of the date it is perfected, it encumbering real a[...]
- The maximum number of shares of each class of capital stock that a company is legally permitted to issue, as authorized by the appropriate authority i[...]
- Variation of authorized capital stock
- An injunction that arises upon the filing of a bankruptcy petition that halts actions by creditors, with certain exceptions, to collect debts from a b[...]
- The amount of financing (total commitment) that lenders are obligated to make available for borrower drawdown during the facility's availability perio[...]
- US GAAP designation of a available-for-sale security.[...]
- A nonderivative financial asset that is not classified as a loan receivable, held-to-maturity security or trading security – it is measured at fair [...]
- A variant of the receivables turnover ratio that converts it into the number of days takes for a firm to collect its receivables: 365 ÷ Receivables T[...]
- The average number of days inventory is held until it is sold: 365 ÷ Inventory Turnover.[...]Back to Top ↑
- B
- A credit facility to advance funds only when a borrower cannot obtain financing under short-term instruments, such as commercial paper.[...]
- A lease transaction in which a lease funder makes a nonrecourse loan to the lease originator after inception of the lease that is secured by the colla[...]
- A party designated to act as the servicer in a securitization transaction in the event of the original servicer’s failure to perform or insolvency i[...]
- A financial statement that reports the financial position of an entity at the end of an accounting period by presenting the major categories and value[...]
- The evaluation of the structure of a company’s balance sheet and the nature and value of its assets, liabilities and equity, typically over two or m[...]
- The financial condition of a company when it has insufficient assets to pay all its debts in full or its aggregate balance sheet liabilities exceed it[...]
- When a firm's total liabilities exceed its total assets, where its net worth is negative.[...]
- When a firm’s total assets are greater than its total liabilities, where its net worth is positive.[...]
- A lease payment structure that provides for level periodic payments that are relatively low during the lease term and a relatively large final rental [...]
- Either a depository financial institution, such as a commercial bank, savings and loan association or credit union, or nondepository financial institu[...]
- Variation of information memorandum
- A bank or bank affiliate that offers leasing as part of its product mix through its regular lending units, a special leasing unit within the bank, a s[...]
- 1. The meeting held by lead arrangers with co-underwriters and commonly required for large financings where questions about the deal, tiers (tickets) [...]
- An individual or entity that is formally deemed unable to satisfy its financial obligations to creditors and that has been judged legally insolvent th[...]
- A nontechnical term for a legal state of insolvency.[...]
- The contractual subordination of debt such that the borrower is premitted to make and the junior lender to receive payments as long as no bankruptcy b[...]
- The lease of a marine vessel (ship, boat) where the vessel's legal, registered owner (lessor) transfers its possession, use, control to the bareboat c[...]
- The lease payment for a bareboat charter of a specified amount, usually per day and payable monthly in advance by the demise charterer to the legal an[...]
- The party that takes the place of the legal, registered owner (lessor) of a maritime vessel and becomes responsible for crewing, maintenance, operatio[...]
- The contractual right of a lessee to purchase the leased asset at a fixed price that is substantially below its expected fair value when the option be[...]
- The The lessee’s contractual right to extend a finance lease beyond its basic lease term for rental payments substantially below the asset’s expec[...]
- The reference market rate (e.g., LIBOR or EURIBOR) used by lenders for calculating the interest cost they incur in obtaining funding in the required a[...]
- A financial model used in acquisition and project finance, including the written business plan and cashflow projections, upon which the prospective le[...]
- The series of recommendations on banking regulation – Basel I, Basel II and Basel III – issued by the Basel Committee on Banking Supervision (BCBS[...]
- The noncancellable lease term where a renewal option is found in a finance lease arrangement, during which the lessor expects to recover the asset cos[...]
- One hundredth of one percent (0.01%).[...]
- 1. The possibility that a change in interest rate will cause a change in the yield on different rate-sensitive assets, liabilities and off-balance she[...]
- Abbreviation for Basel Accords
- Abbreviation for Bureau of Economic Analysis
- A financing arrangement by which the arranging bank agrees to use its “best efforts” or “commercially reasonable efforts” to market and place [...]
- A bank bidding strategy without fear of losing, if a deal appears less favorable for the bank but it wants to protect its reputation with the client; [...]
- An aggressive bank bidding strategy with the objective to win the lead mandate, if a deal appears potentially attractive.[...]
- The separation of a body into two parts, such as the separation of a derivative from its host hybrid security and accounting for both the host and the[...]
- Referring to a relatively low-volume, high-value assets, costing in excess of $500,000 according to DBRS and Fitch and more than $5mn according to ELF[...]
- Equipment that costs in excess of $500,000 according to DBRS and Fitch and more than $5mn according to ELFA, such as aircraft, ships and large industr[...]
- The lease financing of low-volume, high-value assets, such as aircraft, ships, telecommunications equipment and large industrial plants, arranged unde[...]
- Credit or a term loan provided by a single lender to a borrower, as opposed to a multilateral facility, suitable for the funding requirements that can[...]
- A document that evidences the transfer of title to an asset from the seller to the buyer upon payment, subject to the terms of a purchase order or ass[...]
- Each hour or part thereof elapsing from the moment when the chocks are removed from the wheels of an aircraft until the chocks are next again returned[...]
- The group of persons elected by a firm’s shareholders, usually at an annual meeting, authorized to perform such management functions as setting broa[...]
- Abbreviation for board of directors
- Any secured or unsecured, interest bearing or discount capital market debt instrument, regardless of its issuer and maturity.[...]
- The percentage of the cost of qualifying assets (most types of tangible personal property and acquired computer software) that the IRS allows a busine[...]
- The process by which arrangers solicit subscriptions (tickets) and revise terms to ensure successful syndication.[...]
- A syndicate lead arranger that manages the syndication process, determines the loan pricing, tiers and titles (brackets) offered, allocation to each l[...]
- The issuing of invitations to prospective lenders, communicating information to the banks, informing the borrower and the management group of daily pr[...]
- 1. The party (individual or organization) that receives funds and bears the direct repayment obligation to repay those funds, as specified in a financ[...]
- The borrower and any guarantor, as used in LSTA documentation.[...]
- The percentage amount of credit that can be extended against eligible collateral, such that it does not exceed the discounted value that lenders can e[...]
- Abbreviation for basis point
- Abbreviation for bargain-purchase option
- The failure of a contractual party to perform in accordance with the terms and conditions of an agreement.[...]
- The first available secondary market price after syndication closing and the deal is completed, reported in percentage points of par.[...]
- A clear, simple and objective standard comprised of objective criteria that can be applied to judge a situation and used to resolve ambiguous issues i[...]
- Abbreviation for bargain-renewal option
- Describing the syndicate when lenders are free to trade their loans in the secondary market without restriction, which occurs after the loan is closed[...]
- Structured financing that, similar in design to securitization, allows lessors to borrow against the future cash flow of their funded lease portfolio [...]
- The sale of most or all of a firm or selected business lines with a view to preserving going-concern value.[...]
- An agency of the US Department of Commerce that is responsible for collecting and publishing economic data, including the national income and product [...]
- The requirement that an entity determine whether its business model for financial assets is to either (a) hold the instruments with the intention to r[...]
- The accounting concept that considers the personal assets of a firm’s owners to be separate and distinct from the business entity’s assets, it app[...]
- The guarantee of a vendor to buy back its leased equipment from the lessor upon lease termination, which reduces the lessor’s resale and residual va[...]
- Back to Top ↑
- C
- Variation of cancellable lease
- Generally an operating lease (rental) that may be terminated by either the lessee or the lessor without penalty.[...]
- The reduction of the whole or any part of a lender's commitment by the borrower, which applies first to the prepayment of drawn term loans.[...]
- The amount of capital in relation to risk weighted assets required by regulatory authorities that financial institutions must hold to ensure their abi[...]
- Manufactured resources that are used in economic activity to produce goods and services.[...]
- capital leaseGAAPVariation of finance lease
- Any tradable debt instrument with a maturity greater than one year, including both notes and bonds.[...]
- The total amount of owners’ equity and long-term funded debt invested in a company.[...]
- The cash flow ratio that measures the relationship between a firm's cash-generating ability and its capital expenditures (CapEx), a ratio greater than[...]
- Variation of capitalization of earnings
- The transfer of retained earnings to paid-in capital accounts, where it is capitalized – often achieved by means of stock dividends.[...]
- The cost of the funds (interest) used to finance self-constructed long-term assets, which results in an increase in the total amount of fixed assets a[...]
- The recognition of the total interest incurred by the lessor on progress payments made to a manufacturer or constructor until the asset’s delivery b[...]
- A division, subsidiary or joint venture established with a leasing company by a vendor (manufacturer or dealer) with the primary purpose of providing [...]
- The amount at which an asset is recognized in the balance sheet after deducting accumulated depreciation, loss allowance or impairment losses.[...]
- The original historical cost of an asset less the total amount of depreciation or amortization accumulated on the asset less the total of any asset im[...]
- A special exception in loan agreements for disapplying a provision, it being used primarily to exclude specific subsidiaries from being captured by th[...]
- All cash on hand (i.e., coins, bank notes, personal checks, bank drafts and cashier’s checks) and all of the firm’s cash on demand deposits with b[...]
- The balance sheet and cash flow statement accounts reporting the combined value of all cash and cash equivalents items.[...]
- Variation of cash
- The cycle from the conversion of cash into inventory, from inventory into accounts receivable, and then back into cash: Days Inventory Outstanding + D[...]
- The cash flow from investments, calculated by adding depreciation, amortization and noncash charges to net earnings and subtracting preferred dividend[...]
- A short-term, highly liquid investment that is readily convertible to known amounts of cash and so near its maturity (generally, an original maturity [...]
- The net cash received in any period, taking into account net operating income, debt service, capital expenses, loan proceeds, sale revenues, and any o[...]
- Any ratio that measures the ability of a firm’s cash flow to support its operations.[...]
- The anaylsis of cash flow statements to determine the flow of cash into and out of a company and its ability to generate cash and cash equivalents, th[...]
- A firm's net cash inflow resulting directly from its regular operations, equaling the firm’s operating revenue less operating expenses plus noncash [...]
- The most conservative of the liquidity ratios as it considers only actual cash and cash equivalent balances as available for paying off current liabil[...]
- 1. The exchange of the cash value difference between the current market price (spot price) of the underlying asset and the settlement price on the fin[...]
- The financial condition of a company when it is unable to pay its debts as they mature and come due for payment in the ordinary course of business.[...]
- When a company is unable to pay its debts as they mature and come due for payment.[...]
- The cash flow ratio that shows the levels of working capital needed to maintain a firm’s operations by comparing the actual cash flows from operatio[...]
- The repayment of a maturing loan under a revolving credit facility with the proceeds of a rollover loan without the use of cash, which is usual for re[...]
- The damage, destruction or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual, where a "sudden event" is one[...]
- Abbreviation for cash conversion cycle
- Abbreviation for commercial due diligence
- Abbreviation for collateralized debt obligation
- Abbreviation for credit default swap
- Typically 4-6 months from facility signing by the mandated arrangers, during which lead arrangers must provide certain funding to the borrower in orde[...]
- The finance facility provision obliging lead arrangers to provide certain funding to the borrower in order to complete the cash element of an acquisit[...]
- The document signed by the lessee acknowledging that the leased asset has been received by the lessee, that the lessee accepts the asset in its receiv[...]
- A document certifying appropriate insurance coverage of a leased asset.[...]
- Abbreviation for cash flow
- An occurrence when the power to govern the financial and operating policies of a company is obtained by one or more other parties, which is generally [...]
- A form of bankruptcy under the US Bankruptcy Code that affords the debtor in possession a number of mechanisms to reorganization and restructure its b[...]
- A distressed-debt restructuring in which an insolvent firm’s incumbent management remains in control of the company and is responsible for managing [...]
- A form of bankruptcy under the US Bankruptcy Code that enables individuals with regular income to develop a plan to repay all or part of their debts t[...]
- The bankruptcy process under the US Bankruptcy Code where the bankruptcy trustee gathers and sells (liquidates) the debtor's nonexempt assets and uses[...]
- chargeBEVariation of lien
- The reduction of a loan or lease and increase in the allowance for loan and lease losses (ALLL) by the amount of the impairment.[...]
- chargeeBEVariation of secured party
- A record that evidences both a monetary obligation and a security interest in specific personal property (goods), in the software or license of softwa[...]
- The ... requiring the bidder for a target company in a UK public takeover to prove that it has “certain funds” available to complete the acquisiti[...]
- The highest quality of commercial office space or building available for lease.[...]
- The second highest quality of office space or buildings available in the commercial real estate lease market.[...]
- Suboptimal office space or buildings for rent, usually because the property is relatively dated compared to newer or recently refurbished property or [...]
- A self-contained concept within a written contract that can be read and acted on its own, it possibly having a number of subclauses or referencing oth[...]
- A motion or petition filed with the appropriate court or authority that seeks the return of assets that were fraudulently transferred.[...]
- A provision found in the mandate letter or commitment letter in which the borrower undertakes that neither the borrower nor any borrower group company[...]
- A market flex structured such that only specified changes are allowed, such as a margin flex or structure flex.[...]
- A lease that does not contain a purchase or renewal option, it requiring the lessor to take possession of the asset at the end of the lease term, ther[...]
- The satisfaction of all obligor conditions precedent (CPs) to a financing agreement, as of when financing parties are obligated to make the financing [...]
- When all the conditions precedent (CPs) to a finance agreement are satisfied by all obligors, as of when all lenders are obligated (committed) to make[...]
- The defined in a loan agreement as the first date after the borrower satisfies the conditions precedent, which is the date of completion of an acquisi[...]
- Compensation received by participant lenders in general syndication from underwriters and paid on final allocations for lender due diligence and credi[...]
- co-agentAEVariation of co-lead arranger
- A largely ceremonial title awarded to participant lenders for tickets in order of decreasing size usually during general syndication for relatively la[...]
- A syndicate title for a co-underwriter during the sub-underwriting phase of primary syndication, in exchange for a corresponding portion of the underw[...]
- A designation used for a participant lender as junior member in general syndication that takes the smallest ticket available.[...]
- A lead arranger, joint lead arranger or sub-underwriter who together underwriter the total commitments in a loan syndication.[...]
- Abbreviation for cost of goods sold
- A specific asset or group of assets (personal or real property) that has been pledged or title to which has been assigned by a debtor (borrower, issue[...]
- The analysis of the ability of collateral to support a loan and the collateral proceeds to satisfy any remaining loan obligations.[...]
- The transfer of the rights to the rental payments from and a security interest in a leased asset by the asset’s owner and lessor to the lease funder[...]
- The internal guidelines that lay down the type of collateral that a lender generally accepts, it including instructions on assessing acceptable collat[...]
- Variation of collateral catalog
- The value of the collateral underlying the loan relative to the size of the loan, including the ratio of senior secured loan to junior debt in the cap[...]
- The cash arising from disposition of collateral and the rights and certain claims against the collateral, first against expenses resulting from the co[...]
- A structured pay-through security created by a special purpose vehicle (SPV) that buys an originator’s receivables or other financial assets that se[...]
- A guarantee that generally cannot be enforced until the beneficiary of the guarantee has obtained and sought to enforce a judgment against the debtor [...]
- The date as of which the effects of insolvency are applicable or the judicial decision to commence insolvency proceedings becomes effective.[...]
- A depository financial institution (banks) that accepts deposits of money from the public for the purpose of making business, personal and mortgage lo[...]
- A detailed review of a target company's commercial status, focused on the market position of the company’s products and/or services.[...]
- Any land or building used for commercial purposes, generally encompassing any real property other than a single-family residence or a residential lot,[...]
- The financing that a lender commits to make to a borrower, commonly in some form of confirmation (commitment letter or letter of intent), in which the[...]
- The date set by bookrunners for commitments from lenders/investors, subject to legal documentation review, which must be evidenced in writing by eithe[...]
- A nonrefundable fee required by the lessor at the time a lessee accepts a commitment in order for the lessor to allocate the funds required for the le[...]
- A per annum fee set as a spread over an interbank rate paid by borrowers to lenders on the undrawn (unused) portion of a credit facility on a pro rata[...]
- A document prepared by the lessor and presented to the lessee that sets forth the lessor’s commitment to provide the proposed lease, it generally pr[...]
- A document in which a prospective lender commits to an arranger to provide a specified amount of a facility’s total commitment in the primary syndic[...]
- The collective term for the commitment letter, fee letter and, if applicable, engagement letter, together with the related annexes, schedules and/or e[...]
- In commitment letters, the period of time that lenders have committed to make loans available to the borrower.[...]
- Security held for the benefit of all lenders, generally by a common security agent/trustee, with all secured creditors having equal claim on the same [...]
- The residual equity in a company in that all other financial claims against the firm have priority over this class of equity, it typically entitling i[...]
- A financial statement that expresses each line item of the statement as a percentage of a base item of that statement, either of a single company over[...]
- Any business entity, typically incorporated. 2. [LMA] (cap) The borrower in LMA investment grade facility documents. 3. [LMA] (cap) The subsidiary of [...]
- A parent company and its subsidiaries jointly.[...]
- The measurement and comparison of variables in financial statements over two or more reporting periods or of two or more companies for the purpose of [...]
- The completion of an acquisition in accordance with the acquisition agreement in LMA-style leveraged acquisition finance documentation.[...]
- A type of deferred consideration to the vendor for the sale of the target company in a leveraged acquisition finance transaction the final amount of c[...]
- The individual depreciation of each separate component of an asset – commonly big-ticket equipment and real estate – that is significant to the to[...]
- An out-of-court restructuring arrangement between a financially distressed debtor and the debtor’s creditors acting collectively to resolve the debt[...]
- Any nonderivative financial instrument that is comprised of both liability and equity components, it calling for split accounting under IFRS.[...]
- All income and expenses recognized by a company during an accounting period as a result of the changes in equity except for those due to contributions[...]
- A special modification to the contractual terms and conditions of a loan granted by the lender to a borrower facing financial difficulties in order to[...]
- A loan that a lender would not grant to debtors with similar risk in order to increase the probability of recovering a significant portion of the debt[...]
- The purchaser of the asset in a conditional sale transaction, who has the right to possess and use the asset while making the installment payments.[...]
- The sale of an asset with the financing manufacturer, bank or finance company withholding title to the asset from the buyer the until all payment for [...]
- The seller of an asset in a conditional sale transaction.[...]
- The seller of the asset, typically also the asset’s vendor, in a conditional sale transaction, who purchases and finances the asset.[...]
- Together, the confidentiality letter and the front running letter accepted by prospective lenders and investors in order to participate in the primary[...]
- A document in which a prospective lender or investor undertakes to treat confidentially any information provided to the mandated lead arranger (MLA) b[...]
- A lien that is assigned voluntarily, such as a mortgage in real estate.[...]
- The accounting convention requiring that when different valuation methods are available, the alternative having the least favorable immediate financia[...]
- The accounting constraint requiring the continued uniform¬ity in the accounting methods applied from period to period in the preparation of financial[...]
- The combined financial statements of a parent company and all its subsidiaries (statements of financial position, statements of comprehensive income, [...]
- The presentation of a parent company and its subsidiaries (affiliates) as one entity in the financial statements of the parent essentially as if the c[...]
- The transfer of real or personal property for less than it is worth.[...]
- A fraudulent act that occurs when a party transfers property in exchange for less than its reasonably equivalent value, such that the value of the par[...]
- An individual who buys a good or service for personal use and not for resale or use in production and manufacturing.[...]
- A commodity, such as a motor vehicle, that is purchased and owned by a consumer and used repeatedly or continuously over a prolonged period.[...]
- Any good that is used or bought for use primarily for personal, family or household purposes.[...]
- An asset whose existence is uncertain.[...]
- A potential obligation whose existence is uncertain and dependent on the occurrence or nonoccurrence of one or more future events to determine the amo[...]
- A lease payment that is not fixed in amount, it depending instead on the occurrence of some specified event other than simply the passage of time.[...]
- An account with a debit balance that reduces the total value of owners' equity, instead of a credit balance as is normal for equity accounts.[...]
- A contra account that reduces gross sales to arrive at operating revenue, including sales returns, allowances and discounts.[...]
- Variation of rental
- A person that enters into a contractual agreement.[...]
- An assessment performed at an individual instrument level to determine whether the contractual terms of a financial asset result in cash flows that ar[...]
- An arrangement where senior and junior loans are made to the same borrower (common debtor) but the senior creditor and junior creditor agree by contra[...]
- A consolidation model under US GAAP in which a reporting entity consolidates any entity in which it has a controlling financial interest.[...]
- Any action undertaken by a company that has the potential to affect the nature, make up and/or ownership of the company's equity, including cash and s[...]
- A turnaround professional appointed to manage the structuring and implementation of the restructuring of the processes, strategy and operations of a f[...]
- The amount of cash or other asset paid or to be paid for the acquisition of a good, service or other future economic benefit or the incurring of a los[...]
- The method of accounting for investments where significant influence over another company does not exist, requiring the investor to record the investm[...]
- An asset valuation model that carries an asset after its initial recognition at cost less accumulated depreciation/amortization and impairment loss, w[...]
- The upfront fees paid to lead arrangers plus the interest margin paid on the loan.[...]
- 1. In manufacturing, the cost of goods purchased, raw materials, overhead and labor that can be directly related allocated to the production of goods [...]
- A promise in an agreement to do certain things or to refrain from doing other things.[...]
- Any ratio that measures a firm’s ability to meet its debt obligations out of earning; the higher the ratio, the greater the ability of the firm to m[...]
- Financial metrics that measure a company’s ability to service its debt and used to assess default risk, such as (EBITDA to interest, EBITDA to debt [...]
- A document prepared by counsel to the lenders that confirms delivery of specified legal documents in satisfaction of certain mechanical closing condit[...]
- Abbreviation for current portion of long-term debt
- Abbreviation for credit rating agency
- Abbreviation for credit rating agency
- A consensual distressed-debt restructuring mechanism that enables the support of one class of creditors for a plan of reorganization to be used to mak[...]
- Abbreviation for commercial real estate
- A bookkeeping entry that affects the right side of all accounts, it decreasing asset and expense accounts and increasing liability, equity and revenue[...]
- An agreement to make money available and an off-balance sheet item of the lender, it becoming a loan once drawn down.[...]
- Any process used for assessing the credit quality of a counterparty through the analytical study of financial statements and other data, including pay[...]
- Any process used for assessing the credit quality of a counterparty (borrower, customer) through the analytical study of financial statements and othe[...]
- A form submitted to a prospective lender or lessor that provides credit information on prospective borrower or lessee, respectively – and occasional[...]
- The decision process that lenders undertake when evaluating a request for credit, it involving preliminary approval and the analysis of the credit’s[...]
- The basic due diligence performed on a prospective or current borrower.[...]
- An over-the-counter bilateral contract of a notional amount and specified term in which the seller receives a series of periodic premium payments from[...]
- The premium for a credit default swap in the form of periodic payments, usually quarterly, a protection buyer makes to a protection seller, expressed [...]
- The premium for a credit default swap in the form of periodic payments, usually quarterly, a protection buyer makes to a protection seller, expressed [...]
- A method or instrument used to improve of the credit profile of a structured financial product or transaction in the form of an internal or external c[...]
- A party that improves the credit rating of an asset-backed security (ABS) above that of the underlying assets.[...]
- An event whose occurrence during the life of a credit default swap gives the protection buyer the right to settle the contract, the three most common [...]
- The total amount of credit that a financial institution has extended and risks losing if the debt is not repaid.[...]
- A credit model used to determine credit losses that have or will probably arise from a credit portfolio in order to calculate the allowance for loan a[...]
- A measure of creditworthiness and the ability of an individual or company to repay debt, especially as assessed and reported by a credit rating agency[...]
- An independent company that evaluates and quantifies the credit risk of banks, nonbank corporations and local and national entities as well as their p[...]
- An independent company that evaluates and quantifies the credit risk of banks, nonbank corporations and local and national entities as well as their p[...]
- The possibility (risk) of financial loss of a creditor (lender, lessor, supplier) arising from the failure of a debtor (borrower, lessee, customer) to[...]
- The possibility (risk) of financial loss of a creditor (lender, lessor, supplier) arising from the failure of a debtor (borrower, lessee, customer) to[...]
- The management of the overall credit risk of a financial institution consistent with its risk appetite, policies and business objectives.[...]
- The management of the overall credit risk of a financial institution consistent with its risk appetite, policies and business objectives, it covering [...]
- The process of determining the creditworthiness and forecasting future performance of existing or prospective consumer and SME borrowers or lessees th[...]
- A largely statistical regression model that quantifies and shows the degree of the probability of the default of a credit applicant on a credit transa[...]
- Financial metrics, such as leverage ratio, interest coverage and collateral coverage.[...]
- A method of financing real estate usually structured as nonrecourse debt whereby a landlord obtains financing of rental property secured by assignment[...]
- The rate used to calculate the effective interest rate (EIR) for the initial recognition of purchase credit-impaired assets, but not included in the l[...]
- An individual, firm, government, company or other legal person that is owed by another party money or some other obligation to perform and that arises[...]
- creditorBEVariation of account payable
- Abbreviation for credit risk management
- Abbreviation for credit risk management
- Abbreviation for corporate restructuring officer
- A guarantee of a subsidiary company's debt by another subsidiary (affiliate-to-affiliate).[...]
- Abbreviation for credit scoring system
- Abbreviation for credit tenant lease
- The accounting period covered by the latest income statement, which corresponds with the period from the previous balance sheet date to the current ba[...]
- Cash and other asset that in the normal course of business is expected to be consumed or converted into cash within one year of the balance sheet date[...]
- The impairment loss model for the recognition and measurement of the allowance for loan and lease losses (ALLL) requiring an entity to estimate the ex[...]
- An obligation that is due for settlement within 12 months from the balance sheet date or in the normal course of the entity’s operating cycle, which[...]
- A current liability and balance sheet account showing the aggregate principal amount of a firm’s total long-term debt (e.g., term loans, bonds and n[...]
- A liquidity that measures a firm’s ability to pay its current debts out of total current assets: Current Assets ÷ Current Liabilities.[...]
- A credit scoring system that typically utilizes both credit bureau data and other data from a credit application and is developed by the creditor (len[...]Back to Top ↑
- D
- Abbreviation for delivery and acceptance
- An aircraft lease where the asset owner provides the aircraft and its maintenance and insurance to the aircraft operator, but without cabin crew.[...]
- Abbreviation for debt-asset swap
- The date when the lessee accepts an asset as delivered for the purpose under the lease, which is when its lease obligations are fully binding without [...]
- The day a bankruptcy is discharged and officially ends.[...]
- The number of days it takes a firm to sell its entire inventory: Average inventory ÷ COGS per Day.[...]
- The number of days it takes for a firm to pay its own accounts payable: Average Accounts Payable ÷ COGS per Day.[...]
- The number of days a firm needs in order to collect on its sales: Average Accounts Receivable ÷ Revenue per Day.[...]
- The fourth-largest global credit rating agency (CRA) based in Toronto, Canada, with approximately 3% of global market share.[...]
- Abbreviation for depreciation, depletion and amortization
- Abbreviation for double-declining-balance method
- Abbreviation for debt-debt swap
- Where investor trading in the US loan market is usually conducted at the large underwriting banks.[...]
- A bookkeeping entry that affects the left side of ledger T-accounts, it increasing asset and expense accounts and decreasing liability, owners’ equi[...]
- Any financial liability or obligation incurred through borrowing (e.g., loan) or issuing (e.g., bonds) or trading (e.g., accounts and notes payable).[...]
- A third-party institutional investor (bank, insurance company, pension fund) unaffiliated with the lessor or lessee that lends the long-term debt fund[...]
- The amount of nonrecourse secured debt funding provided by debt participants (lenders) in a leveraged lease comprising 60% to 80% of the total funding[...]
- The leverage ratio that measures the proportion of all tangible assets that are financed with debt: Total Liabilities ÷ (Total Assets − Intangibles[...]
- A process by which a company that is facing cash flow problems and financial distress attempts to reduce and renegotiate its delinquent debts in order[...]
- A creditor’s cancelling of all or part of the outstanding debt of an individual, company or country, including unpaid accrued interest.[...]
- A debtor’s transfer to a creditor of third-party receivables, real estate, or other assets to satisfy a debt, frequently in order to reduce debt by [...]
- A debt restructuring by which old debt is novated between the same debtor and creditor, with amended terms and conditions and/or a new principal amoun[...]
- A debt restructuring in which a creditor provides new equity capital in the debtor in exchange for cancellation of outstanding debt it is owed, thus i[...]
- The leverage ratio that measures the riskiness of a company’s capital structure by relating the amount of capital supplied by the firm’s creditors[...]
- An individual, firm, government, company or other legal person that owes to another party money or some other obligation to perform and that arises in[...]
- debtorBEVariation of account receivable
- An entity in United States bankruptcy law who has filed a bankruptcy petition but remains in possession of property upon which a creditor has a lien o[...]
- Funding that is offered by banks to distressed firms in a Chapter 11 style-reorganization in order to finance the operations during the restructuring [...]
- A breach of contract that would be an event of default if a grace period elapses, a notice of default is given or a determination of default is made.[...]
- The actions permitted by a contract and applicable law that a party may take to protect and recover its property interests in the event of default of [...]
- The likelihood of a borrower’s being unable to pay interest or principal on time based on the issuer’s financial condition, industry segment and c[...]
- The contractual subordination of debt such that the borrower is premitted to make payment to the junior lender as long as no event of default exists u[...]
- Deferred payment to a vendor for the sale of the target company in a leveraged acquisition finance transaction, including retention, completion accoun[...]
- A liability that represents payment received in advance of the delivery of goods or the rendering of services for which prepayment is made.[...]
- Lease payment that is due after a rent-free grace period and used for assets that do not generate revenue or cost savings until after they have been f[...]
- Tax due for payment in future years as a result of timing differences when different depreciation methods are used for financial reporting and tax pur[...]
- A balance sheet account showing the amount of taxes overpaid or paid in advance and are often created due to taxes paid or carried forward but not yet[...]
- A balance sheet liability account showing the estimated amount of taxes on income earned and recognized for accounting purposes (book income) but not [...]
- Taxes resulting from timing differences when a firm uses different methods for its financial accounting and tax accounting.[...]
- A post-employment benefit plan that creates an obligation of the employer to the company’s employees that is limited to the amount that the employer[...]
- A post-employment benefit plan whereby an employer pays fixed contributions into a fund in the form of a separate entity for the benefit of an employe[...]
- The legally recognized transfer of possession (receipt) of an asset.[...]
- The event in which a lessee agrees that the asset it received is proper and acceptable for the contractual purpose of a lease and that its lease oblig[...]
- The exhaustion of a natural resource, such as mineral deposits, standing timber or oil, through mining, cutting, pumping or other extraction, and the [...]
- An intermediate bankruptcy-remote special purpose vehicle (SPV) created by a securitization transaction’s sponsor in a two-step securitization that [...]
- The periodic allocation of the cost of a tangible asset (property, plant and equipment) other than land and natural resources with the corresponding r[...]
- That portion of the historical cost or other cost base of a tangible fixed asset that is charged (expensed) against the earnings and credited to accum[...]
- Depreciation, depletion and amortization of tangilbe fixed assets, natural resources and intangible assets, respectively; the noncash expenses used in[...]
- The removal all or a part of an asset from an entity's balance sheet when its contractual rights to the cash flows asset expire or all of the asset’[...]
- A financial instrument whose value or price is derived from another instrument (underlying asset), such as an option, forward, futures or swap, as opp[...]
- Abbreviation for debt-equity swap
- Variation of cancellable lease
- Abbreviation for direct-financing lease
- Abbreviation for days inventory outstanding
- A two-party transaction that involves an equipment supplier/vendor (manufacturer, dealer or retailer) and the asset’s user (lessee), whereby the equ[...]
- The method of determining net cash from operating activities that shows each major class of gross cash receipts and gross cash payments, it presenting[...]
- A finance lease arrangement between a lessee and a lessor that is not the manufacturer or dealer of the leased asset, whereby the lessor acquires the [...]
- 1. The interest rate at which expected future cash flows are discounted in the process of computing the present value of a financial instrument.2. The[...]
- The process of computing present value.[...]
- The assignment of the rental stream at the discounted present value of the lease payments and the grant of a security interest in leased equipment to [...]
- The termination of a bankruptcy case without either the entry or a denial of discharge.[...]
- The process by which the whole or part of a company’s affairs is wound-up and its assets redistributed – the last phase of a liquidation.[...]
- A debt restructuring in which a creditor modifies the terms of debt financing to a distressed debtor and, in the process, grants a concession that it [...]
- The identification of banks and investors to invite to sub-underwrite the financing in primary syndication and/or to lend to the borrower in general[...]
- A current liability that is created when a cash dividend is declared, it reducing retained earnings by the amount of the dividend.[...]
- A full-payout lease that contains a bargain purchase option of $1 to buy the leased asset at the end of the lease term.[...]
- An accelerated depreciation/amortization method that doubles the percentage of the straight-line method by which the cost of an asset is expense each [...]
- The guarantee of a subsidiary’s debt by its parent company (parent-to-subsidiary).[...]
- The process of passing finance down the corporate structure of a company group, commonly in acquisition finance from a sponsor to the parent company a[...]
- An increase in an underwriting spread.[...]
- Abbreviation for days payable outstanding
- Abbreviation for discount rate
- A term loan with an extended availability period of two to three years and longer, during which it can be drawn down, generally for capital expenditur[...]
- The borrower’s making use of a financing facility, it being an advance from the borrower’s perspective.[...]
- 1. The date specified in a commitment letter on which the commitment will terminate if a particular condition has not been satisfied or, in acquisitio[...]
- A leasing arrangement in which the owner of an aircraft transfers to the lessee and aircraft operator possession of the aircraft for a specified perio[...]
- Abbreviation for days sales outstanding
- 1. Any due diligence report. 2. A legal due diligence report prepared for and provided in an acquisition finance transaction.[...]
- A formula that expresses a firm's return on equity (ROE) in terms of its net profit margin times its asset turnover times its leverage: (Net Income ÷[...]
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- E
- Abbreviation for exposure at default
- The termination of a lease before the scheduled end of its contractual lease term.[...]
- A charge set at lease inception levied against the lessee in the event of early lease termination to assure recovery of the lessor’s remaining inves[...]
- An option giving a lessee the contractual right to buy the leased asset for a fixed amount at one or more points in time prior to the final scheduled [...]
- The contractual right of a lessee to terminate a lease and surrender – not purchase – the leased asset upon payment of the balance due, including [...]
- A type of deferred consideration to the vendor for the sale of the target company in a leveraged acquisition finance transaction making payment contin[...]
- A firm’s earnings calculated by adding interest expense back to pretax income.[...]
- A measure of a firm's underlying cash flow and ability to service its debt, computed by adding interest expense, depreciation expense and amortization[...]
- Abbreviation for earnings before interest and taxes
- Abbreviation for earnings before interest, taxes, depreciation and amortization
- Abbreviation for early-buyout option
- Abbreviation for expected credit loss
- The credit risk of a financial asset has not increased significantly since initial recognition and entities continue to recognize 12-month expected lo[...]
- A financial asset is underperforming and has experienced a significant increase in default risk since initial recognition – the entity measures a lo[...]
- A debt instrument that is credit impaired and nonperforming – interest income is measured by applying the EIR to the net carrying amount of the inst[...]
- Abbreviation for environmental due diligence
- Variation of closing date
- A technique for calculating and amortizing the cost of a financial instrument by allocating the interest income or expense at a constant periodic rate[...]
- A technique for calculating the actual interest rate in a period based on the carrying value of a financial instrument at the beginning of the account[...]
- Abbreviation for effective interest method
- Abbreviation for expected loss
- Abbreviation for expected loss
- Abbreviation for equipment leasing company
- An electronic document over which a security interest can be granted under Article 9 of the US Unified Commercial Code (UCC).[...]
- Abbreviation for Equipment Leasing and Finance Association
- Abbreviation for Equipment Leasing & Finance Foundation
- The right of the lessee in a noncancellable finance lease to purchase or continue using a leased asset at the end of the lease term as specified in th[...]
- A first lease payment comprised of more than one advance lease payment, with the resulting "rental holiday” equaling the amount of the advance payme[...]
- A detailed review of the environmental conditions and health and safety issues of a target company or real estate for potential risk of environmental [...]
- Abbreviation for end-of-term option
- 1. Any tangible movable asset (personal property) that is repeatedly or continuously used in economic activity in the production of goods and services[...]
- A contractual arrangement whereby one party possesses and uses equipment owned by another party for a specified period of time, in the form of either [...]
- The external financing of equipment that is owned by the lessor but possessed and used by the lessee generally for a significant part of the asset’s[...]
- A US-based "501c3 non-profit organization dedicated to inspiring thoughtful innovation and contributing to the betterment of the equipment leasing and[...]
- A US-based trade association that represents financial services companies and manufacturers in the US equipment finance sector, with the mission to pr[...]
- Any financial institution conducting as its principal business activity the leasing of equipment.[...]
- The grouping and classification of equipment sales or financing transactions into subgroups based on type of equipment, the cost of the underlying ass[...]
- The possession and use of equipment by one party that is owned by another party for a rental period that is usually significantly shorter than the ass[...]
- The possession and use of equipment by one party that is owned by another party for a rental period that is generally substantially shorter than the e[...]
- A transaction in which the owner of equipment that has significant remaining economic life sells the asset under the agreement to simultaneously lease[...]
- The taking out a lease for new equipment by a lessee either at termination of the original lease or prior its termination date, often on favorable ter[...]
- Any financial instrument that evidences the legal right of ownership in a company and where all the payments on the instrument are at the discretion o[...]
- The method of accounting for investments where significant influence – not control – over another company exists, whereby the investor initially r[...]
- A party in a leveraged lease that as owner of the leased asset holds beneficial interest in the asset and has the risk, rewards and full tax benefits [...]
- The funding in a leveraged lease that is provided by the equity participants ranging from 20% to 40% of the investment in the leased asset, it equalin[...]
- Intra-group funding in acquisition finance provided by the equity sponsor/investors to the parent company of the acquiring company evidenced by loan n[...]
- An entity over which an investor has significant influence, generally through control of more than 20% and less than 50% of investee's voting rights, [...]
- An estimate of the time a limited-life asset can be expected to produce revenue or of the total number of service units the asset is expected to produ[...]
- Abbreviation for early-termination option
- A contract that has been fully performed.[...]
- The legal requirement of the contractual parties to a transaction to perform all obligations that they have not yet fully performed, whereby failure o[...]
- Ownership-type operating cost, such as insurance, maintenance and taxes, incurred for leased asset pertaining to the current period.[...]
- The expected impairment of a loan, lease or other financial asset based on changes in its expected credit loss either over 12 months or its lifetime.[...]
- A three-stage approach for estimating and measuring the expected credit loss of a financial and its interest revenue based on changes in its expected [...]
- The amount that a creditor (lender, lessor) can expect on a credit exposure equal to the exposure less the value of the collateral in the event of def[...]
- The amount of a credit exposure that a creditor can expect to lose in the event of default on a credit exposure equal to the exposure less the value o[...]
- A credit loss model used to estimate the amount of impairment loss an entity expects and recognizes on its credit exposures from credit events over a [...]
- The approach to immediately recognize the impairment loss on a financial asset accounted for at amortized cost or FVTOCI on the basis of expected cred[...]
- The payment of cash or other asset to obtain an asset, service or other future economic benefit or to settle a loss.[...]
- An amount of money or other asset used up or the incurrence of a liability (or both) in an accounting period in the course of ordinary business activi[...]
- The potential financial loss due to the occurrence of an adverse event.[...]
- The amount of financial risk that a creditor (bank, leasing company) is exposed to at the moment the debtor goes into default equal to the unamortized[...]
- A charge paid by the lessee for the lessor's forgiving a monthly rent in return for the lessee’s commitment to pay it at a later date.[...]
- Credit enhancement in a securitization that comes from a third party, such a letter of credit, surety bond, wrapped security, or cash collateral accou[...]
- A financial gain or loss that is (i) of material size, (ii) resulting from an event or transaction that is unusual and infrequent in occurrence, and ([...]Back to Top ↑
