debt instrument

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What is a Bond?

What is a bond? It is a corporate or government debt instrument. It represents a loan to the company from the investing public. In this case, the company is the borrower and the investor is the lender. Companies issue bonds to raise money for business investments. What is a Bond? A bond has a par value,

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Treasury Inflation Protected Securities

Treasury Inflation Protected Securities Treasury Inflation Protected Securities or TIPS for short are debt instruments that are issued by the U.S. government. TIPS are indexed with the Consumer Price Index (CPI), and adjust accordingly to the inflation rate presented in the CPI. Treasury Inflation-Protected Securities (TIPS) Explained Treasury TIPS means that the security will adjust

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Secured Claim

See Also: Pledged Collateral Collateralized Debt Obligations Debt Ratio Analysis Debt Service Coverage Ratio (DSCR) Convertible Debt Instrument Asset Based Financing Secured Claim Definition The secured claim definition is debt backed by collateral. It can refer to loans, mortgages, bonds, and other financial debt instruments. As stipulated in the debt contract, the debtor backs the

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Monetize

See Also: Current Assets External Sources of Cash Fixed Assets Cash is in Your Business Track Money In and Out of a Company Monetize Definition Monetizing is the act of converting an item into cash usually a bank note or some other certificate that is readily convertible at a bank into cash. However, there are

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Maturity Date Defined

See Also: Coupon Rate Bond Covenant Definition of a Bond Contract Long Term Debt Non-Investment Grade Bonds Par Value of a Bond Maturity Date Defined In finance, maturity date defined is the date on which a debt instrument is due. For example, when a bond reaches maturity, the issuer must pay the bondholder the principle

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Loan Agreement

Loan Agreement Definition A loan is a debt instrument. One party lends assets, property, or money to another party in exchange for interest payments and the eventual return of the borrowed asset, property, or money. A loan agreement is usually drawn up in writing before any assets change hands between parties. Loan Term Explanation A

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Interest Rate Risk

See Also: Sharpe Ratio Effective Rate of Interest Calculation Fixed Interest Rate vs Floating Interest Rate Interest Expense When is an interest rate not as important in selecting a loan? Interest Rate Risk Definition Interest rate risk is the risk or volatility associated with bonds or long term debt as their interest rates, coupon, yield

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Interest Expense

See Also: Interest Expense Formula What is Compound Interest Effective Rate of Interest Calculation Nominal Interest Rate When is Interest Rate Not as Important in Selecting a Loan? Capitalized Interest Interest Expense Definition Interest expense, defined as a non-operating expense on the income statement, occurs anywhere money is borrowed. Consider this part of a company’s

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Fixed Income Securities

See Also: Long Term Debt Maturity Date Non-Investment Grade Bonds Owner’s Equity Par Value of a Bond Preferred Stocks Core Satellite Portfolio Fixed Income Securities Definition What are fixed income investments? Fixed income securities are financial instruments that represent debt obligations. A company, government, or other organization can raise funds by issuing debt instruments to

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Convertible Debt Instrument

See Also: Company Valuation Coupon Rate Bond Covenant Definition of a Bond Contract Long Term Debt Non-Investment Grade Bonds Par Value of a Bond Preferred Stocks Convertible Debt Instrument (Bond) A convertible bond is a debt instrument issued by a company that can be exchanged for shares of that company’s common stock. The price at

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Commercial Paper

See Also: Convertible Debt Instrument NonInvestment Grade Bonds Collateralized Debt Obligations External Sources of Cash Certificate of Deposit (CD) What Your Banker Wants You To Know Commercial Bank Convertible Debt Instrument Commercial Paper Definition Commercial paper is a short-term debt instrument. Companies can borrow money by issuing it to investors. It is unsecured, meaning collateral

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Collateralized Debt Obligations

See Also: Letter of Credit Investment Banks Double Entry Bookkeeping Current Expenditures Accounts Payable Collateralized Debt Obligations Definition A collateralized debt obligation derivative, or CDO, is an investment grade debt instrument backed by collateral consisting of loans or other debt instruments. The collateral typically consists of bonds with varying degrees of credit quality and risk.

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