Debt at par

The face value of a loan – see debt at fair value

Limited Partnership

A Limited Partnership is one that has at least one General Partner plus a number of Limited Partners. The Limited Partners are like shareholders in a limited company – they are only liable for the debts of the partnership to the extent of their investment.

Debt at fair value

Some companies borrow money with long maturities . The people who have lent the company this money know they can rely on a defined income until the loan matures. They could sell the debt on to someone else but, if the market rate of interest has changed since they lent the money, the debt is […]

Duration

Duration, in the context of a bond, is used as a measure of the sensitivity of a bond to changes in interest rates. Expressed in years, it represents the weighted average of the time it will take to receive all the cash flows from a bond. A bond with most of its cash flows due […]

OAT and BTAN

BTANs and OATs are debt instruments issued by the French government. BTAN Bon à Taux Annuel Normalisé or BTANs (Treasury notes with annual coupons) are medium-term treasury securities with a maturity of 2-5 years. They have a par value of €1 and their settlement is at par value on the maturity date. For streamlining purposes, as […]

buy-outs, MBO and LBO

Buy-outs involve backing a management team to acquire the business that they work for. From this we get MBO (management buyout) and LBO (leveraged buyout, where debt funding forms a significant part of the finance for the deal).

Amortisation

Amortisation is a term describing either, in accounting speak, the action of writing off an intangible asset over time or, in the debt world, repaying part of the principal of the loan on a regular basis (a bit like a repayment mortgage).

WGBI

WGBI stands for the World Government Bond Index, compiled by Citigroup. Citigroup Index LLC designed, calculated and publish the indices, which may be licensed for use as underlying indices for OTC or exchange-traded structured products, including ETFs, swaps, warrants and certificates. The WGBI measures the performance of fixed-rate, local currency, investment grade sovereign (i.e. government) […]

Waterfall Arrangement

A waterfall arrangement or waterfall payment scheme describes the order in which creditors get paid. Two common uses of the term are within the debt and private equity sectors. In a debt context, it is commonly used to describe the seniority of debt liabilities. In the first instance, money flows to repay the most senior debt […]

Non-recourse

Usually applied to debt. Non-recourse debt is debt that has been lent to a particular entity (maybe a company or special purpose vehicle) where the lender cannot recover the debt from the parent company of that entity.

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Debt at par