Glossary
Receivable
In general that which is due or to be due and collectable i.e. total amounts due for goods sold or services rendered.
Recourse
The right to demand payment from someone who has undertaken to pay if someone else in the chain of payees fails to pay.
Refinance
Paying of existing debts with new ones.
Regress
Recourse taken by the holders of bills or drafts to previous holders.
Relending
Funding provided by an ECA to a commercial bank in support for the credits extended by the bank. Usual in Sweden.
Renewal
The process in which an old debt is cancelled by the establishment of a new one, thus renewing or extending the credit.
Rescheduling
The process in which debt repayment is rescheduled usually due to debtor incapability to pay according to original plans.
Residual risk
Risk that cannot be allocated but has to be bore by the financier.
Retention of title
A means of securing payment. Ownership and title are not transferred until the contract prize is paid in its entirety.
Revocable documentary credit
A documentary credit that can be revoked by the issuing bank without the beneficiary's consent.
Secondary market
The market in which an investor purchases a security from another investor rather than the issuer, subsequent to the original issuance in the primary market, also called aftermarket. Exists in respect of P/N and B/Es. Trade Asset Distribution used to describe the operations of a forfaiting house to dilute their risk position.
Sight bill
A bill payable on demand.
Soft loan
A loan with generous repayment terms often due to government subsidies.
Special purpose corporation (SPC)
Corporate entity created and established for a pecial purpose, i.e. project company, also known as special purpose vehicles (SPVs)
Spot rate
The interest rate for funding fixed immediately. Spot funds are at the disposal of the lender in two days time.
Standby credit
Arrangement to lend money in case of need, usually at market rates and sometimes with a commitment fee.
Standby letter of credit
An undertaking issued by a bank at the request of an obligor to a beneficiary that the bank will make payment if the obligor does not fulfil certain defined obligations in accordance with the contract with the beneficiary. Mainly used in the U.S. where bank guarantees are not allowed
Supplier credit
A financing arrangement under which a bank or ECA makes a loan available to the supplier. The loan is then collateralised by the export receivables held by the supplier.
Supply-or-pay contract
A contract under which a supplier agrees to supply raw materials, products or services at a certain price for a stated period, and in the event of non-performance agrees to pay for the alternative supply.
SWIFT
Society for Worldwide Interbank Financial Telecommunication. A Belgian non-profit corporation that provides a telecommunication system used by the banks for exchanging financial messages and transferring funds. Messages are authenticated and thus reliable.
Syndicate
Group of banks that each provide certain funds for financing of a sizable transaction.
Syndicated credit
Club deal. Credits too big for one bank to handle alone. A credit granted jointly by two or more banks.
Take-and-pay contract
A contract that requires the purchaser to take and pay for goods or services only if delivered.
Take-or-pay contract
A contract that requires the purchaser to pay for goods whether delivered or not.
Tenor
The term fixed for payment of a credit.
Term loan
A business loan with a final maturity of more than one year and that is payable according to a specified schedule.
Tied aid credit
Refers to the practice of providing a grant or concession, either alone or combined with an export credit, linked to procurement from the donor country.
Tied loan
A loan made by a government agency that requires a foreign borrower to spend the proceeds in the lender's country.
Time draft
A draft calling for payment on a later date after delivery of goods.
Title
Ownership, document-verifying ownership.
Tranche
In export credits, a portion of the whole financing, to which particular terms and conditions are applied.
Trustee
An individual or organization, which holds or manages and invests assets for the benefit of another.
Use-or-pay contract
See take-or-pay.
Value date
In international (and as well domestic) fund transfers, the date on which the funds are at the disposal of the transferee.
Without recourse
Without right to revert to someone else for the payment of an obligation. In project finance means that the lender has no recourse to the project sponsors.
Yield
The annual rate of return on an investment, expressed as a percentage.