金融IT业务知识－－名词解释篇

Cusip: stands for Committee on Uniform Securities Identification procedures. Formed in 1962, this committee developed a system that identifies securities, specifically U.S. and Canadian registered stocks, and U.S. government and municipal bonds. The CUSIP number consists of a combination of nine characters, both letters and numbers, which act as a sort of DNA for the security – uniquely identifying the issuer and are assigned in an alphabetical fashion; the seventh and eighth characters identify the type of issue; and the last digit us used as a check digit.

Security Coupon: a government security which carries a coupon and pays interest, as opposed to one which pays no interest but is sold at a discount to its face value.

Dated Date:  The dated date is a term that has to do with the terms and conditions associated with various types of debt instruments and other securities. Interest accrual is the defining factor with this type of date. A dated date is simply the date that the earning of interest on the investment begins to take place. The use of a dated date is very common with any type of fixed-income security. In actual function, the investor or buyer makes a payment to the underwriter or issuer of the bond or debt instrument in question for any interest that was earned between the settlement date and the dated date. At the same time, the buyer also pays for the face value of the debt instrument. The underwriter in turn reimburses this amount as part of the first interest payment is made back to the buyer.

Hard Call protection: The period in the life of a callable bond during which the issuing company is not permitted to redeem the bond. Hard call bonds have this feature as a sweetener for investors, because even if interest rates drop, which would normally cause a bond to be called and reissued at the lower interest rate, hard call protection guarantees investors will receive the stated return for a fixed number of years, before the bond can be called. This protection typically lasts for the first three to five years of the bond’s life.

Callable Security: A callable security or redeemable security is a security with a call provision. This provides for the early retirement (“call” or “redemption”) of the security. Redemption may be required if certain conditions are met (mandatory redemption) or it may be at the issuer’s option. The two common forms of callable securities are callable preferred stock and callable bonds.

Pre-Refunding Bond: A type of bond issued to fund another callable bond, where the issuer actually decides to exercise its right to but its bonds back before the scheduled maturity date. The proceeds from the issue of the lower yield and/or longer maturing pre-refunding bond will usually be invested in Treasury bills (T-bills) until the schedule call date of the original bond issue occurs. For example, support that in June 2006, XYZ Corp decided to call its 9% callable bond (originally set to mature in 2009) for $1,100 on its first call date of January 2007. In July, XYZ Corp issued a new bond yielding 7% and took all the proceeds from that bond and invested them into T-bills ensuring that enough money would be available to retire the issue come January. Using pre-refunding bonds can be a good method for companies to refinance their older issue bonds when interest rates drop.

Insurance-linked securities (ILS) are broadly defined as financial instruments whose values are driven by insurance loss events. Those such instruments that are linked to property losses due to natural catastrophes represent a unique asset class, the return from which is uncorrelated with that of the general financial markets.

Weighted Average Coupon(WAC): The weighted-average gross interest rates of the pool of mortgages that underlie a mortgage-backed security(MBS) at the time the securities were issued. A mortgage-backed security’s current WAC can differ from its original WAC as the underlying mortgages pay down at different speeds. In the weighted-average calculation, the principal balance of each underlying mortgage is used as the weighting factor. For example, suppose a MBS is composed of two different pools of mortgages: $6 million worth of mortgages that yield 7.5% and a pool of $4 million mortgages that yield 5%. The WAC would be 6.5%. The WAC on a mortgage-backed security is an important piece of information used by analysts to estimate the pre-pay characteristics of that security. It is an important relative value tool in MBS portfolio management and analysis.

Conditional Prepayment Rate – CPR: A loan prepayment rate that is equal to the proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period. The calculation of this estimate is based on a number of factors such as historical prepayment rates for previous loans that are similar to ones in the poll and on future economic outlooks. The CPR can be used for a variety of loans. For example, mortgages, student loans and pass-through securities all use CPR as estimates of prepayment. Typically, CPR is expressed as a percentage. For example, a pool of mortgages with a CPR of 8% would indicate that for each period, 8% of the pool’s remaining principal outstanding will be paid off.

 Yankee Bond: A bond denominated in U.S. dollars that is publicly issued in the U.S. by foreign banks and corporations. According to the Securities Act of 1933, these bonds must first be registered with the Securities and Exchange Commission(SEC) before they can be sold. Yankee bonds are often issued in tranches and each offering can be as large as $1 billion.

Crossover Fund: An investment fund that has investment holdings in both public and private equity. This is to say that it invests in companies that are traded publicly, and in companies that are privately held.

Sinking Fund: a fund established by a government agency or business for the purpose of reducing debt by repaying or purchasing outstanding loans and securities held against the entity. It helps keep the borrower liquid so it can repay the bondholder.

Floating security: A security which is bought and held in street name with the expectation that it will be quickly resold at a profit.

Original Issue Discount – OID: The discount from par value at the time that a bond or other debt instrument is issued. It is the difference between the stated redemption price at maturity and the issue price. An original issue discount bond is a bond issued at a price below par. The most extreme example of an OID is a zero-coupon bond. OID is considered to be a form of interest, so tax issues can get a bit complicated.

Dummy Cusip: An identification number that may be internally assigned to a security by a firm until an official CUSIP number is issued.

Default: in finance, default occurs when a debtor has not met his or her legal obligrations according to the debt contract, e.g. has not made a scheduled payment, or has violated a loan covenant(condition) of the debt contract. A default is the failure to pay back a loan. Default may occur if the debtor is either unwilling or unable to pay his or her debt. This can occur with all debt obligations including bonds, mortgages, loans, and promissory notes.

Dividend: A distribution of a portion of a company’s earnings, decided by the board of directors, to a class of its shareholders. The dividend is most often quoted in terms of the dollar amount each share received (dividends per share). It can also be quoted in terms of a percent of the current market price, referred to as dividend yield.

International Securities Identification Number (ISIN) uniquely identifies a security. Its structure is defined in ISO 6166.Securities for which ISINs are issued include bonds, commercial paper, stocks and warrants. The ISIN code is a 12-character alpha-numerical code that does not contain information characterizing financial instruments but serves for uniform identification of a security at trading and settlement.