AIBD (Association of International Bonds Dealers): Organization founded in 1969 in Switzerland, with the purpose to establish uniform new issuance and trading practices in the Eurobond market.
Aladdin Bond: A new Eurobond issue exchanged for an old bond issue.
Appreciation: Increase in the market value of an asset relative to a second asset.
Basis: The price of a commodity (cash or spot) minus the future price of it.
Best Efforts Basis: An offer made by the lead manager to a Eurobond issuer to place the issue at the best price negotiable.
BIS (Bank for International Settlements): A bank located in Basel, Switzerland, founded in the thirties to handle the payment of German reparations after WW1. Currently the bank monitors international banking activity and operates as a clearing system for the European Monetary System.
Bulldog Bonds: GBP denominated foreign bonds offered in United Kingdom.
Cedel: A major clearing system (together with Euroclear) in the Eurobond market. Cedel is based in Luxemburg and is jointly owned by several European banks. It began its operations in 1971.
Closing Day: It is the day on which new bonds from the issuer are delivered against payment by members of a Eurobond issuing syndicate. This occurs about 14 days after the offering of a new issue.
Coupon: The detachable part of the Eurobond certificate that represent the periodic interest payment on it.
Coupon Yield: The interest yield on a Eurobond when calculated as the annual amount of money paid on coupons divided by the face value of the bond.
Droplock Bond: A Eurobond which starts as an FRN.
Dual-currency Eurobond: A Eurobond denominated in one currency with a coupon or repayment of principal at a fixed rate in another currency.
Euroclear: A major clearing system (together with Cedel) in the Eurobond market. Euroclear Clearance System Ltd. is located in Brussels and is operational since 1968.
Eurodollar Bonds: Eurobonds denominated in US Dollars.
Face Value: The nominal amount paid on a Eurobond at redemption, excluding any final coupon payment.
Global Bond: Temporary debt certificate issued by a Eurobond borrower, representing the borrower’s total indebtedness.
Grey Market: A forward market for newly issued Eurobonds. This is a market that takes the form of forward contracting between market participants during the period between the announcement day of a new issue and the closing day.
Issue Price: The price at which a new Eurobond is announced. The issue price is stated as a percentage of the bond’s face value.
Kassenverein: Depositary banks which form the Eurobond clearing system in Germany.
Lock-up: Terms used to refer to procedures following in a Eurobond issue to prevent the sale of securities to US investors during the period of initial distribution. This is in order to meet the terms and conditions of the Securities Act 1933.
Management Fee: The part of the total investment banking fees accruing to the management group in a Eurobond issue.
Negative Pledge: A contractual undertaking by a borrower in a Eurobond issue not to undertake certain future actions. For example, not to offer future creditors improved rights, with regards to those possessed by existing creditors.
Offering Day: The day on which a Eurobond issuer and the managing group sign the subscription agreement containing the final specification of a new issue.
Participation: Term to refer to the status of taking part in a new Eurobonds issue, and specifically to the size of the underwriting commitment.
Redemption: Discharge on a Eurobond obligation by the issuer by payment of the bond’s face value to the holder.
Samurai Bonds: Yen denominated foreign bonds issued in Tokyo.
Seasoned Eurobonds: Eurobonds that for more than 90 days have traded in the secondary market.
Straight Eurobonds: Eurobonds with fixed-rate coupons and without any features which could be classified as options.
Tombstone: Advertisement placed in the specialised press by banks participating in an underwriting syndicate for a Eurobond issue to record their role in managing and underwriting the issue.
Yankee Bond: A US Dollar denominated foreign bond issued in New York.
Zero-coupon Bond: Eurobond that pays no interests but which is redeemed at its face value at maturity. Zero coupon bonds are also known as pure discount bonds and streakers.
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