bondholder
91Cash Collateral — Cash collected when liquid assets are sold during Chapter 11 bankruptcy proceedings. This can be obtained through the sale of cash equivalent securities or through the sale of personal property against which debt may be secured. Cash collateral… …
92Closed-End Indenture — A term in a bond contract that guarantees that the collateral used to back the bond issue cannot be used again to back another bond issue. This is the opposite of an open end indenture in which more than one bond can be backed by a single… …
93Collateralization — The act where a borrower pledges an asset as recourse to the lender in the event that the borrower defaults on the initial loan. Collateralization of assets gives lenders a sufficient level of reassurance against default risk, which allows loans… …
94Convertible Bond — A bond that can be converted into a predetermined amount of the company s equity at certain times during its life, usually at the discretion of the bondholder. Convertibles are sometimes called CVs . Issuing convertible bonds is one way for a… …
95Cram-Down Deal — 1. A situation in which a creditor is forced to accept undesirable terms imposed by a court during a bankruptcy or reorganization. 2. A merger or acquisition with unfavorable terms, in which shareholders or debtors of the target company are… …
96De Minimis Tax Rule — A rule that states that capital gains tax must be paid on a bond if the bond was purchased at a discount to the face value in excess of a quarter point per year between the time of acquisition and maturity. The reason for the capital gains tax is …
97Death Spiral — A type of loan investors give to a company in exchange for convertible debt, which, like convertible bonds, typically has provisions that allow investors to convert the bonds into stock at below market prices. This can cause the original… …
98Defeased Securities — Securities that have been secured by another asset, such as cash or a cash equivalent, by the debt issuing firm. Firms that have created defeased securities, which are typically bonds, will have sufficient cash set aside for retirement of the… …
99Deferred Equity — A type of security, such as preferred shares or convertible bonds, that can be exchanged in the future at a predetermined price for another type of instrument, such as shares of common stock. These securities are known as deferred equity because… …
100Dual Currency Bond — A debt instrument in which the coupon and principal payments are made in two different currencies. The currency in which the bond is issued, which is called the base currency, will be the currency in which interest payments are made. The… …
