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Financial Terms | |
Offer |
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Definition of OfferOfferIndicates a willingness to sell at a given price. Related: bid
Related Terms:Cash offerA public equity issue that is sold to all interested investors. Competitive offeringAn offering of securities through competitive bidding. Dual syndicate equity offeringAn international equity placement where the offering is split into two Exchange offerAn offer by the firm to give one security, such as a bond or preferred stock, in exchange for Fixed-price tender offerA one-time offer to purchase a stated number of shares at a stated fixed price, General cash offerA public offering made to investors at large. general cash offerSale of securities open to all investors by an already-public company. ![]() Initial Public OfferingA firms first offering of its shares to the investment public, after registration requirements of the various securities regulators have been met. Initial public offering (IPO)A company's first sale of stock to the public. Securities offered in an IPO are initial public offering (IPO)First offering of stock to the general public. Negotiated offeringAn offering of securities for which the terms, including underwriters' compensation, Offering memorandumA document that outlines the terms of securities to be offered in a private placement. Offering MemorandumA "prosperous-like" document providing detailed descriptions of a company's past, present, and prospective business operations. It is normally prepared for the use of potential purchasers of securities offered under the seed capital or private placement prospectus exemptions. PIBOR (Paris Interbank Offer Rate)The deposit rate on interbank transactions in the Eurocurrency market Primary offeringA firm selling some of its own newly issued shares to investors. Public offeringThe sale of registered securities by the issuer (or the underwriters acting in the interests of the ![]() Public offeringThe sale of new securities to the investing public. Reoffering yieldIn a purchase and sale, the yield to maturity at which the underwriter offers to sell the bonds Rights offeringIssuance of "rights" to current shareholders allowing them to purchase additional shares, seasoned offeringSale of securities by a firm that is already publicly traded. Tender offerGeneral offer made publicly and directly to a firm's shareholders to buy their stock at a price tender offerTakeover attempt in which outsiders directly offer to buy the stock of the firm’s shareholders. Tender offer premiumThe premium offered above the current market price in a tender offer. Antidilution ProvisionsA clause in a shareholders agreement preventing a company from issuing additional shares, without allowing the current shareholders the opportunity to participate in the offering to avoid dilution of their percentage ownership. AskThis is the quoted ask, or the lowest price an investor will accept to sell a stock. Practically speaking, this Ask priceA dealer's price to sell a security; also called the offer price. Bank discount basisA convention used for quoting bids and offers for treasury bills in terms of annualized ![]() Benchmark interest rateAlso called the base interest rate, it is the minimum interest rate investors will Best-efforts saleA method of securities distribution/ underwriting in which the securities firm agrees to sell Bid priceThis is the quoted bid, or the highest price an investor is willing to pay to buy a security. Practically Brokered marketA market where an intermediary offers search services to buyers and sellers. Cash discountAn incentive offered to purchasers of a firm's product for payment within a specified time Channel StuffingShipments of product to distributors who are encouraged to overbuy under CircleUnderwriters, actual or potential, often seek out and "circle" investor interest in a new issue before Closing rangeAlso known as the range. The high and low prices, or bids and offers, recorded during the CommissionThe fee paid to a broker to execute a trade, based on number of shares, bonds, options, and/or Competitive biddingA securities offering process in which securities firms submit competing bids to the Comprehensive due diligence investigationThe investigation of a firm's business in conjunction with a Consolidated Omnibus Budget Reconciliation Act (COBRA)A federal Act Conversion RightTerm life insurance products are offered as non-convertible or convertible to a certain time in the future. The coversion right has a time limit, usually to the policy holder's age 60 or possibly even age 70. This right means that the policy holder has the right to convert their existing policy to another specific different plan of permanent insurance within the specified time period, without providing evidence of insurability. There is a slightly higher cost for a term policy with the conversion priviledge but it is a valuable feature should a policy holder's health change for the worst and continued insurance coverage becomes a necessity. Credit UnionCredit unions are community based financial co-operatives and most offer a full range of services. All are owned and controlled by members who are also shareholders. Credit unions are regulated provincially and insured by a stabilization fund, deposit insurance or guarantee corporation. Crediting rateThe interest rate offered on an investment type insurance policy. Creditor (Credit Insurance)A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity. Creditor Proof ProtectionThe creditor proof status of such things as life insurance, non-registered life insurance investments, life insurance RRSPs and life insurance RRIFs make these attractive products for high net worth individuals, professionals and business owners who may have creditor concerns. Under most circumstances the creditor proof rules of the different provincial insurance acts take priority over the federal bankruptcy rules. Current couponA bond selling at or close to par, that is, a bond with a coupon close to the yields currently Cushion bondsHigh-coupon bonds that sell at only at a moderate premium because they are callable at a Dealer optionsOver-the-counter options, such as those offered by government and mortgage-backed Deferred-annuitiesTax-advantaged life insurance product. Deferred annuities offer deferral of taxes with the Direct placementSelling a new issue not by offering it for sale publicly, but by placing it with one of several DistributionsPayments from fund or corporate cash flow. May include dividends from earnings, capital Dutch auctionAuction in which the lowest price necessary to sell the entire offering becomes the price at Effective spreadThe gross underwriting spread adjusted for the impact of the announcement of the common Either-way marketIn the interbank Eurodollar deposit market, an either-way market is one in which the bid EndowmentLife insurance payable to the policyholder, if living on the maturity date stated in the policy, or to a beneficiary if the insured dies before that date. For example, some Term to age 100 policies offer the option of taking the face amount of the policy as a cash payout at age 100 if the policyholder is still alive and paying all required income taxes on the amount received or leaving the policy to pay out upon death whereupon the payout is tax free. Equilibrium market price of riskThe slope of the capital market line (CML). Since the CML represents the Equivalent taxable yieldThe yield that must be offered on a taxable bond issue to give the same after-tax Euro-medium term note (Euro-MTN)A non-underwritten Euronote issued directly to the market. Euro- EurobondA bond that is (1) underwritten by an international syndicate, (2) offered at issuance Ex-rightsIn connection with a rights offering, shares of stock that are trading without the rights attached. Exclusionary self-tenderThe firm makes a tender offer for a given amount of its own stock while excluding External marketAlso referred to as the international market, the offshore market, or, more popularly, the Family and Medical Leave ActA federal Act containing the rules for offering FCIAForeign Credit Insurance Association. A private U.S. consortium of insurance companies that offers Fixed price basisAn offering of securities at a fixed price. FloatThe number of shares that are actively tradable in the market, excluding shares that are held by officers Fund familySet of funds with different investment objectives offered by one management company. In many GNMA-IIMortgage-backed securities (MBS) on which registered holders receive an aggregate principal and Go-aroundWhen the Fed offers to buy securities, to sell securities, to do repo, or to do reverses, it solicits Go publicThe process of offering a company’s shares for sale to the public through an Gross spreadThe fraction of the gross proceeds of an underwritten securities offering that is paid as HandleThe whole-dollar price of a bid or offer is referred to as the handle (ie. if a security is quoted at Hell-or-high-water contractA contract that obligates a purchaser of a project's output to make cash Index warrantA stock index option issued by either a corporate or sovereign entity as part of a security Individual InsuranceInsurance that is offered to individuals rather than groups. Intermarket sectorspread The spread between the interest rate offered in two sectors of the bond market for Intramarket sector spreadThe spread between two issues of the same maturity within a market sector. For Investment decisionsDecisions concerning the asset side of a firm's balance sheet, such as the decision to Investment Tax CreditA reduction in taxes offered to firms to induce them to increase investment spending. IPOSee initial public offering. Issue dateThe date a security is first offered for sale. That date usually Junk bondA bond with a speculative credit rating of BB (S&P) or Ba (Moody's) or lower is a junk or high Lapse subsidizedThis refers to the practice of some life insurance companies to offer policies which are lower in price because they have assumed a high probability that the policies will be cashed in by their owners for one reason or another before the death benefit becomes available. It is a bold and risky offer by the insurance company because sometimes the purchasers of these policies simply don't lapse them. LIBORThe London Interbank offered Rate; the rate of interest that major international banks in London Living BenefitSome insurance companies include this benefit option at no cost to their policy holders. The insurer considers on a case to case basis, the need for insurance funds before death. If the insured can demonstrate a shortened life of less than two years and with some insurers one year, the insurer will consider releasing up to 50% or a maximum of $100,000 of the life insurance coverage held by the insured. Not all insurers offer this benefit for free. The need has resulted in specific stand alone living benefit/critical illness policies coming into existence. Look under "Different types of Life Insurance" for further information. You might have heard of "Viatical Settlements", the practice of seriously ill people selling the rights to their life insurance policies to third parties. This practice is common in the United States but has not caught on in Canada. Make a marketA dealer is said to make a market when he quotes bid and offered prices at which he stands Mass customizationHigh-volume production runs of a product, while still offering Medium-term noteA corporate debt instrument that is continuously offered to investors over a period of MezzanineStage of a company's development just prior to going public, in Venture Capital language. Venture capitalists entering at that point have a lower risk of loss than at previous stages and can look forward to early capital appreciation as a result of the Market Value gained by an Initial Public offering. Mortgage InsuranceCommonly sold in the form of reducing term life insurance by lending institutions, this is life insurance with a death benefit reducing to zero over a specific period of time, usually 20 to 25 years. In most instances, the cost of coverage remains level, while the death benefit continues to decline. Re-stated, the cost of this kind of insurance is actually increasing since less death benefit is paid as the outstanding mortgage balance decreases while the cost remains the same. Lending institutions are the most popular sources for this kind of coverage because it is usually sold during the purchase of a new mortgage. The untrained institution mortgage sales person often gives the impression that this is the only place mortgage insurance can be purchased but it is more efficiently purchased at a lower cost and with more flexibility, directly from traditional life insurance companies. No matter where it is purchased, the reducing term insurance death benefit reduces over a set period of years. Most consumers are up-sizing their residences, not down-sizing, so it is likely that more coverage is required as years pass, rather than less coverage. Municipal bondState or local governments offer muni bonds or municipals, as they are called, to pay for Mutual fundMutual funds are pools of money that are managed by an investment company. They offer Negotiated saleSituation in which the terms of an offering are determined by negotiation between the issuer New moneyIn a Treasury auction, the amount by which the par value of the securities offered exceeds that of Non-Smoker DiscountIn October 1996 it was announced in the international news that scientists had finally located the link between cigarette smoking and lung cancer. In the early 1980's, some Canadian Life Insurance Companies had already started recognizing that non-smokers had a better life expectancy than smokers so commenced offering premium discounts for life insurance to new applicants who have been non-smokers for at least 12 months before applying for coverage. Today, most life insurance companies offer these discounts. One man pictureThe picture quoted by a broker is said to be a one-man picture if both the bid and offered Opening priceThe range of prices at which the first bids and offers were made or first transactions were Original issue discount debt (OID debt)Debt that is initially offered at a price below par. Pac-Manstrategy Takeover defense strategy in which the prospective acquiree retaliates against the Participating PolicyA policy offers the potential of sharing in the success of an insurance company through the receipt of dividends. 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