Beruflich Dokumente
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CREDIT
Ach automated clearinghouse credits
• The requirement that a claim holder voting against a plan of reorganization must
receive at least as much as he would have if the debtor were liquidated.
Consumer credit
• Credit granted by a firm to consumers for the purchase of goods or services. Also
called retail credit.
Credit
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• Money loaned.
Credit analysis
Credit crunch
• If depositors in one location (say Michigan) cannot provide deposits to fund loans in
another location (say California), many good loans may go unfunded. This is a credit
crunch.
Credit enhancement
• The backing of paper with collateral, a bank LOC, or some other device to achieve
a higher rating for the paper.
The firm that securitizes mortgages guarantees against defaults on the underlying
pool. This is called credit enhancement.
Credit monitoring
Credit period
• The number of days after the beginning of the credit period until the payment of the
account is due.
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Credit policy
• Refers to companies that rate public, private or consumer credit ratings. The
primary credit rating companies for sovereign or country and corporate ratings are:
Duff and Phelps Credit Rating Company, Moodys, andStandard and Poors. For
Credit rationing
• Occurs when the terms a borrowing relationship become more restrictive. For
example, higher margin requirements for security transactions indicates tighter credit
requirements. Sometimes, credit rationing may occur in some industries and not in
others to promote or discourage specific types of activities. Credit rationing can
occur when interest rates have been trending either up or down. In the latter,
defaults often prompt new and higher margin requirements. Thus, credit availability
is more limited and interest rates can move higher in the near term as cash
demands increase.
Credit risk
• The risk that an issuer of debt securities or a borrower may default on his
obligations or that the payment may not be made on a negotiable instrument.
Related: Default risk
• Credit risk refers to the possibility that borrowers sometimes default on their
promises.
The risk that an issuer of debt securities or a borrower may default on his
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Credit scoring
• These are quantitative models that predict bankruptcy. They establish which
factors are important with regard to credit risk. They evaluate the relative importance
of these risk factors, improve the estimation of default probability, automate the
rejection of bad loan applicants, and improve the pricing of the loan. They also help
calculate any potential future loan losses and possible revenues.
Credit selection
• The decision whether to extend credit to a customer and how much credit to
extend.
Credit spread
• Is an option position whereby the end result is a credit. For example, the investor
who places a vertical bear call spread receives a credit. Similarly, the trader who
places a vertical bull put spread receives a premium credit.
Credit standards
Credit terms
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• The terms of sale for customers who have been extended credit by the firm.
Crediting rate
Creditor
• Lender of money.
Eurocredits
Evergreen credit
Five cs of credit
• Home country credit against domestic income tax for foreign taxes paid on foreign
derived earnings.
• The four key dimensions of credit character, capacity, capital, and conditions used
by credit analysts to provide a framework for in-depth credit analysis.
• The security pledges for larger municipal bond issuers, such as states and large
cities which have diverse funding sources.
• Proportion of new capital investment that can be used to reduce a company's tax
bill (abolished in 1986).
• A letter written by a company's bank to the company's foreign supplier, stating that
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the bank guarantees payment of an invoiced amount if all the underlying agreements
are met.
Letters of credit
Line of credit
• An arrangement by which a bank agrees to lend to the line holder during some
specified period any amount up to the full amount of the line.
Retail credit
• Credit granted by a firm to consumers for the purchase of goods or services. See:
consumer credit.
• A bank line of credit on which the customer pays a commitment fee and can take
down and repay funds according to his needs. Normally the line involves a firm
commitment from the bank for a period of several years.
• A bank line of credit on which the customer pays a commitment fee and can take
down and repay funds according to his needs. Normally the line involves a firm
commitment from the bank for a period of several years.
Secured creditors
Trade credit
• Credit granted by a firm to another firm for the purchase of goods or services.
• Creditors who have a general claim against all the firm's assets other than those
specifically pledged as collateral.