Category: S

Using syndications, participations and subunderwritings to reduce a new loans or bonds risk exposure.

When an insurance firm suffers a loss that causes financial distress because the clients loss is so severe. Protection can be provided using reinsurance mechanisms and diversification. Refer to clash loss.

The redraft of existing, disparate insurance contracts into the new master policy to combine risks and losses under a concise policy. Refer to attachment method.

A company added to prevent bankruptcy by arranging securitization for the sponsor. This company must become a charitable trust that is owned by a third party. The company and sponsor share equity.

After preemptive rights are exercised by the shareholders the remaining shares are purchased in agreement with a firm by underwriters of a rights issue guaranteeing the holdings by the firm of the

Securities registered to an institution that are owned by a client eliminating the need of delivering the security to the owner.

The difference between the swap rate and the benchmark government bond rate. The wider the spread the worse the credit.

Theorizing outcome from risk exposures such as foreign exchange rates, yield curve shifts, or market volatility. AKA stress testing.

When syndicate members get a discount on new issues. This is half the underwriting spread.

A nonyen bond issued by a foreign company in Japan. Refer also to Daimyo, Geisha, Samurai, and Shibosai.

When a sinking fund provision is included in a bonds indenture.

Illegally enticing business from favored clients using allocations to establish a quid pro quo arrangement.

A bank is protected if a customer defaults on a transaction by a standby letter of credit giving the bank the authority to pay the beneficiary and go after the customer to

When a plaintiff makes a motion to prove harm has occurred without having to show how or why to collect damages.

A receiver payer swap where the buyer can enter a swap at a predetermined rate in the future.

A German loan with transferable interest rates among investors.

When brokers sell products from another firm illegaly. The client will not have any recourse against the originating company.

Borrowing securites to sell them short to protect the long position. This is a constructive sale and creates capital gains liability.

An extension of the pure captive by an insurer or reinsurer that writes insurance to cover companies that form an

A market exchange currently taking place. Refer to market, price, and rate.