| Call Risk:
Risk to the investor associated with prepayments by the
issuer of the principal amount of the bonds prior to the
stated maturity date, in accordance with the bonds' redemption
provisions. |
| |
| Capital Appreciation Bonds:
Long-term bonds which pay no current interest, but accrete
or compound in value from the date of issuance to the
date of maturity. CABs differ from zero coupon bonds in
that they are issued at an initial amount and compound
in value, in contrast to zeroes, which are issued at a
deep-discount and compound to par. |
| |
| Capital
Reserves:
Funds that remain
in a bank and are
not loaned out. These
funds can be used
to support a variety
of credit enhancement
tools. Capital reserves
also can be used to
leverage the lending
institution, or borrow
against reserves to
expand the pool of
available loan funds.
|
| |
| Capitalization:
Process of depositing various funds as seed capital into
a lending institution to enable financial services. This
pool of money is distributed, through loans and credit
enhancements, in such a way to ensure that payments are
made back to preserve the corpus. |
| |
| Capitalized Interest:
A specified portion of the original bond proceeds which
will be used to pay interest on the bonds until revenue
from planned sources becomes available upon completion
of construction. |
| |
| Charge
Off:
Alternative term to
write-off. Write-off
is the preferred term.
(See "Write-off".)
|
| |
| Claim:
Synonymous with the term "debt," for purposes of this
document. (See "Debt.") Alternative meanings of the word
"claim" include a request (1) submitted by a lender for
government payment of a defaulted guaranteed loan; (2)
filed with the Department of Justice for the pursuit of
litigation and/or enforced collection of an account; or
(3) filed with an agency for the payment of an amount
considered due to the submitting individual or organization,
such as for medical insurance. |
| |
| Close
Out:
Occurs concurrently
with or subsequent
to an agency decision
to write off a debt
for which the agency
has determined that
future additional
collection attempts
would be futile. |
| |
| Cohort:
Direct loans obligated or loan guarantees committed by
a program in the same year even if disbursements occur
in subsequent years. Post-1992 direct loans or loan guarantees
will remain with their original cohort throughout the
life of the loan, even if the loan is modified. Pre-1992
loans and loan guarantees that are modified shall each,
respectively, constitute a single cohort. (OMB Circular
No. A-11, "Preparation and Submission of Budget Estimates."
Executive Office of the President, Office of Management
and Budget, hereafter cited as OMB Circular No. A-11.)
|
| |
| Collateral:
Any property pledged as security for a loan. |
| |
| Collection
Agency:
Private sector entity
whose primary business
is the collection
of delinquent debts.
|
| |
| Collection:
Process of receiving amounts owed to the federal government,
such as payment on a debt. |
| |
| Commercial:
Adjective used to signify a business activity, regardless
of whether that activity has been undertaken by an individual
or business. |
| |
| Compromise:
Accepting less than the full amount of the debt owed from
the debtor in satisfaction of the debt. Also referred
to as "settlement." |
| |
| Consumer:
Adjective used to signify a personal activity. For example,
a loan to a farmer to buy an automobile for personal use
would be considered a consumer loan. |
| |
| Contingencies:
Existing conditions, situations, or circumstances which
involve uncertainty and which could result in gains or
losses. For example, guaranteed loans represent contingent
liabilities which, in the event of default by the borrowers,
the federal government would be liable to cover the losses
of the guarantors, and thereby sustain the loss itself.
|
| |
| Contract Authority:
A form of budget authority that permits obligations to
be made in advance of appropriations or receipts. Contract
authority therefore is unfunded and requires a subsequent
appropriation or offsetting collection to liquidate (pay)
the obligations. The federal-aid highway program has operated
under contract authority since 1921. |
| |
| Cooperative
Agreement:
Written consent between
two parties to define
the basic structure
and purpose of a financial
transaction, including
the roles the parties
involved and the way
in which funds will
be administered. |
| |
| Corpus:
The corpus refers to all initial funds, additional, and
subsequent revenue deposited for bank capitalization.
The corpus is essentially a "body" of funds that is available,
on a revolving basis, for use in providing financial assistance
to borrowers. |
| |
| Coverage Margin:
The margin of safety for payment of debt service on a
revenue bond, reflecting the number of times (e.g., 1.2)
by which annual revenues after operations and maintenance
costs exceed annual debt service. |
| |
| Credit
Cycle:
Complete credit process,
composed of four phases:
credit extension,
account servicing,
debt collection, and
write-off/close out. |
| |
| Credit Enhancement:
Financial guarantees or other types of assistance that
improve the credit of underlying debt obligations. Credit
enhancement has the effect of lowering interest costs
and improving the marketability of bond issues. |
| |
| Credit
Enhancement:
Financing tools -
such as letters of
credit, lines of credit,
bond insurance, debt
service reserves,
and debt service guarantees
-that improve the
credit quality of
underlying financial
commitments. Credit
enhancements have
the effect of lowering
interest costs and
improving the marketability
or liquidity of bond
issues. |
| |
| Credit
Extension:
Review and approval
of requests for short-
and long-term credit.
|
| |
| Credit
Program:
Federal program that
makes loans and/or
loan guarantees to
non-federal borrowers.
|
| |
| Credit Reporting Bureau:
Private sector entity which collects financial information
on debtors and whose reports on debtors reflect information
received from the public and private sectors. |
| |
| Credit
Score:
A statistically-based
measure of risk of
a particular type
of loan to a particular
borrower. |
| |
| Credit:
Promise of future payment in kind or of money given in
exchange of present money, goods, or services. |
| |
| Current
Discount Rate:
Discount rate used
to measure the cost
of a modification
with respect to the
modification of direct
loans or loan guarantees.
It is the interest
rate applicable at
the time of modification
on marketable Treasury
securities with a
similar maturity to
the remaining maturity
of the direct guaranteed
loans, under either
pre-modification terms,
or post-modification
terms, whichever is
appropriate.
|
| |
| Current
Receivable:
a receivable on which
payment is due within
12 months of the reporting
period. |
| |
|
|
