Instruments and Vehicles

A short-term debt security issued by financial companies and large corporations. Companies sell commercial paper when they need a short-term loan to pay for such things as accounts payable and inventories. Corporate debt that matures in less than one year is typically called commercial paper.

When a company borrows money from an investor and the intention is to convert the debt to equity at some later point.

An arrangement or instrument (such as a future, option, or warrant) whose value is derived from and is dependent on the value of the underlying asset

When a company raises capital by marketing its shares directly to its own customers, employees, suppliers, distributors, and friends in the community. Sometimes referred to as investment crowdfunding.

The responsibility taken for payment of a debt or performance of some obligation if the entity primarily liable fails to repay

A payment for future losses is guaranteed by way of collecting small sums of money from various people and organizations into a collective fund. That that can then be drawn upon in the event one of its members is adversely affected by a predefined risk (example auto, health, and flood insurance)

In this derivative two parties agree to exchange interest rate cash flows based on a specified notional amount, from a fixed rate to a floating rate, or one floating rate to another

The use of debt, equity, and hybrid financing techniques to acquire a company or merge two companies together. The focus of acquisition finance is on identifying the optimal financing solution.

A written promise stating that the maker will pay the holder regular sums of money with or without interest for a specified amount of time and can be either backed by assets (secured) or not backed by assets (unsecured)

The long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of its sponsors

An investor’s ownership position in a publicly-traded corporation. This could be a stock, bond, or an option. It’s a way to represent the relationship between parties

A fiduciary relationship in which one party, known as a trustor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary.

PRIs are made by foundations from their grant disbursement to support charitable activities that involve the potential return of capital within an established time frame

MRIs are drawn from the corpus of the foundation and support a positive social or environmental impact, while generating reasonably competitive rates of financial return

This is the first sale of stock by a private company to the public. IPOs are used by smaller companies to raise money or by larger private companies looking to be publicly traded.

Reconciles the needs of the importer and exporter by financing international trade through lending, issuing letters of credit, factoring, export credit and insurance

An interest-bearing, discounted government or corporate security that obligates the issuer to pay the bondholder a specified sum of money, usually at specific time intervals, and to repay the principal amount of the loan at maturity

These are bonds issued by governments. They can be either local-currency-denominated or denominated in a foreign currency. Sovereign bonds and sovereign debt can be used interchangeably, but sovereign debt can also refer to the total outstanding stock of a country’s government debt

Investments made by individuals or firms through buying and holding of stock in anticipation of income from profit in the form of dividends or capital grants

Capital transfers in cash or in kind payments made by governments or foundations to organizations to finance all or part of the costs of a project, without the expectation of a return of capital

A digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly

A type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank