The Fee charged by a lender to cover or partially cover the lender’s costs of setting up or establishing the receivable. The fee does not guarantee that the receivable will be approved.
The party that usually structures and arranges the transaction offering on behalf of the sponsor, and sometimes also manages the allocations of Debt Securities to investors. Also referred to as a Lead Manager.
An overdue amount that has not yet been paid, on a Receivable that is still performing, i.e. has not yet been written-off. Refer also to Days in Arrears.
The lowest price a seller is willing to accept for a Security.
An item of value that can be converted to cash, and may generate a cash flow. In a Securitisation transaction, the Assets comprise the Receivables that generate cash flows, and technically also include any other Assets owned by the SPV, such as cash in Reserve Accounts.
A type of Debt Security collateralised by the cash flow from a specified pool of underlying Receivables. Typically, this term is used to describe Debt Securities backed by Receivables other than residential or commercial Mortgage Loans, or other Assets
The investments that a Securitisation vehicle may make as permitted by the transaction documents.
The highest price at which a buyer is willing to buy a Security.
Board strategy refers to the plans that the board of a company makes regarding future development of the company. It also usually refers to the steps it intends to take to realise those plans.
An open market and regulated by Deutsche Boerse AG
A written promise to pay a stipulated sum of money to a specified party under conditions mutually agreed upon. Also called a Promissory Note, ‘promise’ or ‘bond’. Throughout this glossary, bonds, and any other forms of securitised Debt issuance, are referred to as Debt Securities.
A party that assists in arranging funding or negotiating contracts for a lender but who does not lend the money themselves. Brokers usually charge a fee or receive a commission for their services.
Any day on which the Relevant Clearing System is open for the acceptance and execution of settlement orders.
An entity that determines the price of an investment product such as a swap. A calculation agent calculates the value of a derivative or the amount owing from each party. The agent also establishes the price for a structured product and may act as its guarantor and issuer.
Cash settlement is the process of recording the debit and credit positions of the parties in the transaction and making the respective cash transfers. In the money market, a transaction is a cash settlement if the securities that have been purchased are paid for on the same day the trade is made.
A cell is created by a cell company for the purpose of segregating and protecting the cellular assets of the company in the manner provided by these regulations and includes a reference to segregated accounts, compartments or units within a company having multiple accounts, compartments or units.
A central securities depository (CSD) is a specialist financial organization holding securities such as shares either in certificated or uncertificated (dematerialized) form so that ownership can be easily transferred through a book entry rather than the transfer of physical certificates.
A system established to settle payments among banks or, in relation to the markets, to facilitate transactions such as the transfer of ownership of securities
This can refer to the settlement of a Receivable or the issuing of Debt Securities. It is the date on which:
- the physical Asset underlying a Receivable contract is sold, or
- the issuance of a Debt Security becomes final
and the new owner/investor takes possession.
The collateral in securities lending can either be other securities or cash. The borrower pays a fee to the lender for the use of the loaned security.
An obligor, also known as a debtor, is a person or entity who is legally or contractually obliged to provide a benefit or payment to another. In a financial context, the term “obligor” refers to a bond issuer who is contractually bound to make all principal repayments and interest payments on outstanding debt.
Several compartments may be created within one legal entity. This allows each compartment to correspond to a distinct portion of assets financed by distinct securities. The compartments allow a pool or assets and corresponding liabilities to be managed separately so that the result of each pool is not influenced by the risks and liabilities of other compartments. Each compartment can be liquidated separately.
Stated annual percentage of Interest paid on a Debt Security.
A written promise to pay a stipulated sum of money to a specified party under conditions mutually agreed upon and secured by Collateral. Throughout this glossary, Bonds, notes, and any other forms of securitised Debt issuance, are referred to as Debt Securities.
A form of settlement that involves the simultaneous delivery of all the necessary documents to give effect to a transfer of securities in exchange for the receipt of the stipulated payment amount.
The process of converting physical financial instruments from paper securities certificates into electronic form by opening a demat account.
A classification for the stated or face value of financial instruments
European Central Bank
European Wholesales Securities Market
Traded via an exchanged compared to over-the-counter
An FVC is an entity whose principal activity meets both of the following criteria:
- it carries out securitisation transactions and its structure is intended to isolate the payment obligations of the undertaking from those of the originator
- it issues debt securities, other debt instruments, securitisation fund units, and/or financial derivatives and/or legally or economically owns assets underlying the issue of these financing instruments that are offered for sale to the public or sold on the basis of private placements.
Gibraltar Stock Exchange
The date at which a security is first made available for public purchase.
Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.
A person or organization that puts money into financial schemes with the expectation of achieving a profit.
International Security Identification Number. The standard coding for internationally traded Debt Securities which is used by most countries.
The date on which a Debt Security is deemed to be issued or originated.
An entity which issues and is obligated to pay amounts due on Debt Securities.
The ability of a lender/Secured Creditor to demand payment from an Obligor/Debt issuer if the Collateral is insufficient to pay the Debt in full. In the case of a cell/compartment/segregated portfolio, recourse is limited to the Assets of the issuer/SPV, and does not extend to other Assets of the Originator.
A person or body appointed under the Malta Financial Services Authority Act to perform the functions set out in Part III of the Financial Markets Act.
A person appointed by the Applicant or Issuer
Lock-up period is a window of time when investors of a hedge fund or another closely held investment vehicle are not allowed to redeem securities.
A dealer in securities or other assets who undertakes to buy or sell at specified prices
The date on which the Principal balance of a Receivable, Debt Security or other financial instrument becomes due and payable or the agreement is renewed
Malta Financial Services Authority – the single regulator for financial services in Malta.
The Markets in Financial Instruments Directive (MiFID) is the framework of EU legislation for: investment intermediaries that provide services to clients regarding financial instruments.
Malta Stock Exchange
Net asset value (NAV) is value per share of a mutual fund or an exchange-traded fund (ETF) on a specific date or time. NAV = (assets – liabilities) / number of outstanding shares
The time frame in which a security can be purchased at the primary market.
Over-the-counter trading, usually conducted via phone or computer networks, as opposed to exchange traded.
The Paying agent is responsible to disburse, or cause to be disbursed, all amounts due to Investors, subject to those amounts being received by the Payment Agent from the Issuer.
A debt instrument whose value is linked to the performance of an underlying asset or risk
The Prospectus Directive is a framework directive made under the Financial Services Action Plan. It provides for a single regime throughout the EU governing the requirement for a prospectus and its content, format, approval and publication.
The credit rating is a financial indicator to potential investors of debt securities
Redemption occurs when the Debt Securities can be redeemed (effectively bought back by the Issuer/Trustee) prior to the Legal Maturity Date
The price at which the issuing company may choose to repurchase a security before its maturity date.
Repayment Date for Securities redeemed or terminated on a certain Valuation Date means the later of the following two days: (i) the fifth Business Day following the relevant Valuation Date, or (ii) the fifth day after which the Company actually receives the proceeds from the Underlying Assets.
Refers to the transfer of receivables to an SPV so the assets are protected and are independent of the originator, hence the cells are separated by law.
A Security Trustee is an institution or individual that holds assets in trust for the purpose of raising finance.
Securitisation Act means the Securitisation Act, Chapter 484 of the laws of Malta.
A segregated portfolio company (or SPC), sometimes referred to as a protected cell company, is a company which segregates the assets and liabilities of different classes (or sometimes series) of shares from each other and from the general assets of the SPC.
Either a qualified investor as defined in terms of the Prospectus Directive and the Companies Act or and investor who acquire securities for a total consideration of at least one hundred thousand Euros (€100,000) per sale
A Special Investment Vehicle, or SPV, is established for the sole purpose of issuing debt securities and investing the issuance proceeds into assets or risks.
The difference between the bid and ask price of a security or asset.
A structured product, also known as a market-linked investment or derivative security, is a pre-packaged investment strategy based on derivatives, such as a single security or a basket of securities.
An offering of additional securities after the issuing company has already had an initial public offering.
A payment system owned and operated by the Eurosystem. It is the leading European platform for processing large-value payments and is used by both central banks and commercial banks to process payments in euro in real time.
The securitised receivables, assets or risks acquired by the SPV
The WKN or Wertpapierkennnummer is a German securities identification code. It is composed of six digits or capital letters (excluding I and O).