dictionary

A to Z Chris Stoakes' Jargon Buster from "All you need to know about the City"


A forfait - The trade finance market where letters of credit are traded
ABS - Asset-backed security - a bond backed by collateral such as a pool of mortgages
Accelerate - The act of a lender in having a loan repaid early, usually because of an event of default
Agent or agent bank - The bank that gets the mandate from a borrower to arrange a syndicated loan for it and collects the repayments from the borrower during life of the loan to distribute to other syndicate members
CDO - Collateralised debt obligation - a bond issue backed by a pool of bonds or those which provide the income stream to pay interest to investors


Sovereign wealth fund - An investment vehicle - a fund dedicated to investing in securitisations such as CDOs and ABSs
Venture capital - Equity finance provided by specialist 'venture capitalist' in return of a share holding in the business (usually a relatively new and small one); they realise their investment when the company floats or is sold in a 'trade sale'; note that they also finance MBOs