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Definition of Plain vanilla
A term that refers to a relatively simple derivative financial instrument, usually a swap or other
A security issue that has no unusual features.
A particular financial asset.
When an item is approved and released for sale, or when a policy or sales contract is accepted.
Also called on-the-run or current coupon issues or bellwether issues. In the secondary
The acceptable Treasury security with the highest implied repo rate; the rate that a
Related: Benchmark issues
In Treasury securities, the most recently auctioned issue. Trading is more active in current
Eurobonds that pay coupon interest in one currency but pay the principal in a different
A special committee of the Financial Accounting Standards Board established to reach consensus of how to account for new and unusual financial transactions that have the potential for creating differing financial reporting practices.
A separate committee within the Financial Accounting Standards Board composed of 13 members representing CPA firms and preparers of financial statements
Securities sold in the Euromarket. That is, securities initially sold to investors
A transaction used to record the reduction in inventory from a location,
Age of an insured as at the policy issue date, using "age nearest" next birthday formula.
The date a security is first offered for sale. That date usually
Date on which a policy is approved.
Issued share capital
Total amount of shares that are in issue. Related: outstanding shares.
The number of shares that the company has sold to the public.
Shares that have been issued by the company.
An entity that issues a financial asset.
Under the GNMA-II program, pools formed through the aggregation of individual
The market in which a new issue of securities is first sold to investors.
Original issue discount debt (OID debt)
Debt that is initially offered at a price below par.
Investors are not able to buy all of the shares or bonds they want, so underwriters must
Presold issue An issue
that is sold out before the coupon announcement.
Reopen an issue
The Treasury, when it wants to sell additional securities, will occasionally sell more of an
issue of securities offered only to current stockholders.
issue of a security for which there is an existing market. Related: Unseasoned issue.
Seasoned new issue
A new issue of stock after the company's securities have previously been issued. A
1) Procedure for selling blocks of seasoned issues of stocks.
Small issues exemption
Securities issues that involve less than $1.5 million are not required to file a
Specific issues market
The market in which dealers reverse in securities they wish to short.
Stock that has been authorized for use, but which has not yet been
issue of a security for which there is no existing market. See: seasoned issue.
additional paid-in capital
Difference between issue price and par value of stock. Also called capital surplus.
Adjustable rate preferred stock (ARPS)
Publicly traded issues that may be collateralized by mortgages and MBSs.
A means of compensating the broker of a program trade solely on the basis of commission
An arrangement whereby a security issue is canceled if the underwriter is unable
American Depositary Receipts (ADRs)
Certificates issued by a U.S. depositary bank, representing foreign
Securities certificates issued in the U.S. by a transfer agent acting on behalf of the foreign
A report issued to a company’s shareholders, creditors, and regulatory
A signed statement of facts made by a person applying for life insurance and then used by the insurance company to decide whether or not to issue a policy. The application becomes part of the insurance contract when the policy is issued.
Also known as a trading index (TRIN)= (number of advancing issues)/ (number of declining
authorized share capital
Maximum number of shares that the company is permitted to issue, as specified in the firm’s articles of incorporation.
Back To Back Annuity
This term refers to the simultaneous issue of a life annuity with a non-guaranteed period and a guaranteed life insurance policy [usually whole life or term to 100]. The face value of the life insurance would be the same amount that was used to purchase the annuity. This combination of life annuity providing the highest payout of all types of annuities, along with a guaranteed life insurance policy allowed an uninsurable person to convert his/her RRSP into the best choice of annuity and guarantee that upon his/her death, the full value of the annuity would be paid tax free through the life insurance policy to his family members. However, in the early 1990's, the Federal tax authorities put a stop to the issuing of standard life rates to rated or uninsurable applicants. Insuring a life annuity in this manner is still an excellent way to provide guaranteed tax free funds to family members but the application for the annuity and the application for the life insurance are separate transactions and today, most likely conducted through two different insurance companies so that there is no suspicion of preferential treatment given to the life insurance application.
A procedure for making the effective date of a policy earlier than the application date. Backdating is often used to make the age of the consumer at policy issue lower than it actually was in order to get a lower premium.
BAN (Bank anticipation notes)
Notes issued by states and municipalities to obtain interim financing for
A guaranteed form of payment which is issued in amounts over $5,000.
basic earnings per share (EPS)
This important ratio equals the net
Bonds that are not registered on the books of the issuer. Such bonds are held in physical form by
Benchmark interest rate
Also called the base interest rate, it is the minimum interest rate investors will
A method of securities distribution/ underwriting in which the securities firm agrees to sell
State laws covering the issue and trading of securities.
Bonds are debt and are issued for a period of more than one year. The U.S. government, local
A long-term debt instrument in which the issuer (borrower) is
Security that obligates the issuer to make specified payments
Usually a fixed interest security under which the issuer contracts to pay the lender a fixed principal amount at a stated date in the future, and a series of interest payments, either semi-annually or annually. Interest payments may vary through the life of bond.
A debt security issued by a government or company. You receive regular interest payments at specified rates while you hold the bond and you receive the face value when it matures. Short-term bonds mature in less than five years; medium-term bonds mature in six to ten years; and long-term bonds mature in eleven years or greater.
Fixed interest security issued by a corporation or government, having a specific maturity date.
The contract that sets forth the promises of a corporate bond issuer and the rights of
The managing underwriter for a new issue. The book runner maintains the book of securities sold.
Security issue where one or two underwriters buy the entire issue.
A term signifying the extent an underwriter's commitment in a new issue, e.g., major bracket or
Bonds issued by emerging countries under a debt reduction plan.
Bond whose principal repayment is linked to the price of another security. The bonds are
Foreign bond issue made in London.
The risk that the cash flow of an issuer will be impaired because of adverse economic
List of new issues scheduled to come to market shortly.
a. An option to buy a certain quantity of a stock or commodity for a
A date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond
The price, specified at issuance, at which the issuer of a bond may retire part of the bond at a
An embedded option granting a bond issuer the right to buy back all or part of the issue prior
A financial security such as a bond with a call option attached to it, i.e., the issuer has the right to
A bond that allows the issuer to buy back the bond at a
Bond that may be repurchased by the issuer before maturity at specified call price.
Canada Savings Bonds
A bond issued each year by the federal government. These bonds can be cashed in at any time for their full face value.
Ownership shares issued by a business corporation. A business
capital structure, or capitalization
Terms that refer to the combination of
The total amount of debt and equity issued by a company.
A public equity issue that is sold to all interested investors.
Certificate of deposit (CD)
Also called a time deposit, this is a certificate issued by a bank or thrift that
Underwriters, actual or potential, often seek out and "circle" investor interest in a new issue before
Mortgage against which no additional debt may be issued.
Collateral trust bonds
A bond in which the issuer (often a holding company) grants investors a lien on
A bank that ranks just below a lead manager in a syndicated Eurocredit or international bond
Short-term unsecured promissory notes issued by a corporation. The maturity of
Short-term unsecured notes issued by firms.
Common stock equivalent
A convertible security that is traded like an equity issue because the optioned
A securities offering process in which securities firms submit competing bids to the
he written statement that follows any "trade" in the securities markets. Confirmation is issued
A type of bond that has an infinite life but is not issued in the U.S. capital markets.
Rules set by the Chicago Board of Trade for determining the invoice price of each
The percentage by which the conversion price in a convertible security exceeds the
Convertible exchangeable preferred stock
Convertible preferred stock that may be exchanged, at the
Debt obligations issued by corporations.
Cost Accounting Standards Board (CASB)
a body established by Congress in 1970 to promulgate cost accounting
Coupon / Coupons
The periodic interest payment(s) made by the issuer of a bond
The nominal interest rate that the issuer promises to pay the
Provisions in a bond indenture or preferred stock agreement that require the bond or preferred
The process of analyzing information on companies and bond issues in order to estimate the
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