Securitization and Structured Finance Post Credit Crunch: A Best Practice Deal Lifecycle Guide

Appendix A

Glossary

Tip

If you come across a certain term, whilst reading this book, that is not covered in the following glossary, I suggest you Google the term or take a look at Wikipedia—it’s surprising how much information you can find on the internet nowadays—most of it is pretty accurate.

ABCP Asset-backed commercial paper whose principal and interest payments receipts come from the cash flows of the underlying assets. ABCP carries the risk that outstanding commercial paper cannot be reissued in order to repay maturing commercial paper and, usually, a so-called “back-stop” liquidity facility may be available to provide sufficient cash in order to repay investors.

API An application programming interface is in the broadest sense an interface between two (or more) software programs or applications that enable them to communicate with each other and to exchange information.

ARM (option ARM) Adjustable mortgage rate loan (i.e., a mortgage loan with an interest rate that is periodically adjusted and based on a specified index rate).

Advance rate The advance or loan advance rate is typically calculated by taking the loan balance and dividing it by the value of the underlying collateral. Advance rates are usually used in auto loan transactions and are equivalent to the loan-to-value (LTV) ratio used for residential mortgage loans. Consequently and similar to the LTV ratio, the higher the advance rate, the less equity is at stake by the borrower and, as a result, the less loan ...