Bonds without Borders: A History of the Eurobond Market

Glossary

This glossary focuses on the instruments, practices and the jargon of the cross-border bond markets. It does not seek to explain the relevant regulatory bodies and regulatory measures relevant to the capital markets, which would probably fill a volume on their own.

Account

A client or customer.

Account X

A client order in a pot syndication where the client's identity is not revealed.

Active bookrunner

A bookrunner on a corporate bond issue charged with arranging, pricing and allocating the issue.

Amortisation

Debt repayment by way of instalments over a scheduled period.

Asset stripping

The process of buying an undervalued company with the intent to sell off its assets for a profit.

Back office

A securities firm's accounting, clearing and settlement operations.

Bail-in

When banks are in difficulty bondholders forfeit part or all of their investment to ‘bail in’ the bank before taxpayers are called upon.

Basis points or ‘bps’ or ‘bips’

One hundredth of one percent, i.e. 1 bp = 0.01%.

Basis risk

The risk that the relationship between the differences (spread) of the price or rates of two closely linked financial instruments will change over time.

Bear squeeze (or short squeeze)

A bond rising in value having been subject to a substantial level of short sales forcing traders to take losses.

Bearer bonds

A bond owned by whoever is holding it, rather than having a registered owner.

‘Bells and whistles’

Additional features of a security designed to attract investors ...