Tony Williams,  Loan Technologist

An acronym for a Demand Deposit Account - commonly known as a checking account - offered by a commercial bank. Funds on deposit in a demand deposit
account can be withdrawn at any time for any reason without any prior notification.
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An intra-day overdraft on a checking account that is rectified by the end of the day. This situation most commonly results when a client wishes to wire transfer
funds to another institution during the day without having sufficient funds in its account. Since the client expects sufficient funds from another source to be credited
to the account later in the day, the bank will usually accommodate the customer's request. If sufficient funds are not received by the close of business, the account
will be listed as overdrawn.
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One or more financial arrangements structured for a company or group of companies by a bank or group of banks to meet that company's financing needs. A deal
can range from the simple (e.g. one line of credit to a single borrower for a specific purpose) to the highly complex (e.g. a package of various facilities available to
numerous companies for different purposes). The "deal" is not a legal concept; rather, is the term used to describe the financing solution structured to meet a
customer's needs.
 

Add Answer hereA person or firm that buys and sells financial instruments for a profit. A dealer maintains an inventory of these financial instruments in order to readily meet
market needs. (Different from "Broker")
 

This document, given to all prospective investors, includes confidential financial and background information about the borrower, credit terms, and general legal
information concerning the deal/facility/loan being sold. (Also known as the "Book")
 

See Syndicate.

A loan made outside of any established credit facility that has no fixed maturity date, but which is payable to the bank upon demand. Demand loans can be called
by the bank at any time for any reason.
 

Any financial instrument or contract that directly binds one party to another (e.g. a bank to a shareholder or depositor). Examples include shares of common or
preferred stock; bonds; commercial paper; certificates of deposit; savings, checking, and other bank deposits; fed funds borrowed; other purchased or brokered
funds; etc.

A loan where the interest and fees are deducted from the proceeds of the loan at the time it is made. At maturity, the borrower repays the full face value of the
loan.
 

A financial instrument issued by a bank for the account of one its clients on behalf of a beneficiary. Used primarily to facilitate trade, the documentary L/C acts as
a payment mechanism by which the established credit standing of the bank is substituted for that of its client. The bank will pay all draws against the documentary
letter of credit by the beneficiary as long as the documentation presented is in order. Any draws under the letter of credit are either deducted from the client's
account with the bank or are funded by a loan or banker's acceptance.
 

An order in writing requesting that payment be made under a standby letter of credit.
 

The process whereby a borrower receives funds from the lender in response to a loan request. This process may be specifically regulated as part of an overall credit
agreement or may simply be handled in accordance with the bank's established policy.
 

The legal entity that is drawing down funds. Commonly known as a "Borrower."

See All-In-Rate.

Equity investments consist of investments made by bank holding companies in the equity portion of a highly-leveraged financing package either indirectly through
an investment pool or equity fund, or directly through specific transactions.
 

Rate setting is generally two business days prior to the effective date of the borrowing and is usually for 1, 2, 3, or 6 month periods. This unadjusted rate must be
adjusted for reserves before being quoted to the borrower. A spread is added to the adjusted rate to get the All-In-Rate.
 

Date on which a facility expires. It also represents the date until which fees are accrued. (See also Post Expiry Fees)

See Expiry.

See Expiry.

A credit arrangement established by a bank for use by one or more of its clients. In some cases (e.g. guidance line of credit) the client is totally unaware of the
facility's existence; it is set up by the account officer to ease the internal approval process of occasional loan requests by the client or to ease the approval process
for such non-credit activities as daylight overdrafts. In other cases (e.g. advised line of credit), the client is aware that a facility is in place; however, there is no
contractual obligation on behalf of the bank to advance funds. Finally, some facilities are formal, legal commitments (e.g. revolving credits, term loans, etc.) which
commit the bank to advance funds to a client, providing that the borrower is in compliance with the terms and conditions of the loan agreement.

Fee charged to the borrower for establishing and maintaining a credit facility on its behalf; usually paid quarterly, in arrears, as a percentage of the total commit-
ment amount.

An acronym for Financial Accounting Standards Board statement of accounting practices number 52. FASI3 52 governs foreign currency translation and establishes
  standards for reporting foreign currency transactions in the financial statements of the reporting enterprise. It also addresses the standards for translating foreign
  currency financial statements into US Dollars.

An acronym for Financial Accounting Standards Board statement of accounting practices number 77. FASI3 77 specifics that the sale of receivables with recourse
  should under certain conditions be reported by the transferor as a liability and under certain conditions as a sale. The business of most banks is such that sales of
  receivables arc made without recourse.
 

An acronym for Financial Accounting Standards Board statement of accounting practices number 91. FASI3 91 governs accounting for non-refundable fees and
  costs associated with originating or acquiring loans and the initial direct cost of leases.

Abbreviation for the Federal Reserve Bank.

Loans of funds immediately available from reserve accounts at any Federal Reserve Bank. These loans are typically overnight transactions where one bank lends its
  excess reserves at the Fed to another bank with deficit reserves. These funds are traded freely in the market.
 

 Line of credit established by one hank to lend Fed Funds to another hank in the overnight Federal Funds market.
 

The market rate of interest charged on Fed Funds. This rate is freely floating and can become volatile at the end of the calendar quarter. In a credit agreement, this rate can be used as a basis for a pricing option to which a spread would be added.
 

A unique code that identifies a customer to the Federal Reserve Bank for wire transfer purposes.

A fee can be charged for a variety of reasons. A descriptive fee type is associated with the fee to explain why the fee is being charged. Usage fees on commitments,
  and late fees on delinquent loans are two examples.

A non-variable fee expressed as an absolute dollar (or other currency) amount.
 

Any loan tied to an interest rate that is fixed to maturity or until the next rollover date. Typically, these loans are tied to a match funded rate (e.g. 1 month
LIBOR, 90 day CD, etc.).
 

Add Answer hereWith respect to an SBLC, the date upon which the SBLC is automatically extended to the next expiry date. This extension is usually an annual occurrence.
 

Any loan tied to a base rate that may fluctuate over the life of the loan. Typically, these arc loans that are tied to a bank's prime rate or some other market rate
(e.g. Fed funds, Money Market, etc.).
 

The type of funding used in a match-funded loan (e.g. 1-!'iuro, 1,1130R, CD, etc.).

The area within the bank's treasury department that is contacted by the platform for indicative rates, cost of funds, funding alerts (new bookings, repricings,
conversions), rate settings, and prepayments. Once contacted, this group actually gets the funds for match-funded loans.
 

A short explanation provided by a primary to secondary investors as they come into a deal. The memo describes the deal's loan outstanding profile at that point in time (e.g. number of' loans, outstanding amounts, rates, repricing dates, etc.) and is the basis on which the secondary will fund under its commitment. Secondary investors will not fund without a funding memo. Although these memos are usually sent out one day prior to funding, they are occasionally sent out on the sameday when a bank is particularly eager to close.
 

An acronym for Generally Accepted Accounting Principles. These principles arc used in the accounting for and reporting of financial data as defined within the
United States.
 

Abbreviation for an accounting General Ledger.

the consolidated summary book of accounts covering an entire enterprise. For a bank, the general ledger would reflect all changes iti its financial position and all
subsidiary ledgers (e.g. branch and department totals].
 

A legal entity that guarantees all or a part of the paytment of outstanding loans by the borrower. If the borrower defaults, the lender looks to the guarantor for
payment.
 

A non-binding indication — which is usually not advised to the custorner -- of the maximum amount that the bank would consider lending to the customer over a
specified timeframe. Specific requests for funds are assessed on their merits and can be accepted ot rejected at the bank's option without prejudice or recourse by
the customer.
 

A highly-leveraged transaction is one in which a large amount of debt is used with a small amount of equity to finance a transaction (e.g. leveraged buy outs, some
forms of aciquisition finance, corporate restructurings, etc.). In addition to this generic definition, the Pederal Reserve Bank has specific guidelines that define Highly Leveraged Transactions ("HLT's") for regulatory purposes.

See Skim.

An abbreviation for International Banking Facility. It is a functional unit within a U.S. bank that allows the bank to conduct business with foreign entities in a
legal environment similar to that of the Eurocurrency market without having to establish an offshore facility.
 

The bank's average cost of funds rate based on actual costs over a period of time. This rate is derived by dividing the dollar cost of obtaining funds for non-match
funded loans by the amount of monthly average funded assets. The rate is established by the funding desk and is the same cost of funds rate used to fund prime
rate loans.

The bank that has issued a particular financial instrument, such as a letter of credit.
 

The bank that has the strongest relationship with a particular person or firm. It is the bank to which the person or firm usually looks for support and advice in any
financial undertaking. Accordingly, the lead bank is typically chosen as agent bank in any new deals.
 

The amount that the borrower owes to the lender regardless of any charged off amounts. (See also Book Balance)
 

Any individual, corporation, partnership, joint venture, organization, etc. having the legal ability to conduct business.

That portion of the bank responsible for originating credit facilities.

Letters of credit can be split into two categories: Documentary Letters of Credit and Standby Letters of Credit, both of which are defined separately in this
glossary. These financial instruments are issued by banks to facilitate trade and/or to enhance the creditworthiness of a client.
 

An acronym for the London Inter Bank Offered Rate. Due to the time factor (the rate is set in London), this rate is typically set three days prior to the effective
date of the borrowing and is usually set for 1, 2, 3, or 6 month periods. Once this rate is adjusted for reserves, a spread is added to the adjusted LIBOR rate to get
the All-In-Rate.

Monies lent for consideration under contract from one legal entity to another at a some rate of interest with some maturity.
 

See Credit Agreement.

An acronym for Letter Of Credit Professional, an operations specialist.
 

With respect to a facility, long term generally denotes a tenor of one year or longer.