56 terms our corporate, trade finance and fund-services desks use every day — defined without jargon, grouped by discipline, and linked to the instruments and calculators they describe.
A guarantee securing repayment of a prepayment made by a buyer, callable if the seller fails to deliver. Typically reduces in step with delivery milestones.
An instrument submitted with a tender, ensuring the bidder will sign the contract if awarded. Usually 1–5% of contract value and released when the tender is decided.
A documentary credit to which a second bank adds its own undertaking to pay, so the exporter carries the confirming bank's risk rather than the issuing bank's or its country's.
A guarantee given by one bank to another, instructing it to issue a local guarantee to the beneficiary. It lets a beneficiary hold paper from a bank in its own jurisdiction while the risk stays with the applicant's bank.
A settlement method where the exporter's bank releases shipping documents against payment or acceptance. Cheaper than a letter of credit but carries no bank payment undertaking.
The International Standby Practices 1998, the ICC rulebook drafted specifically for standby letters of credit. Distinct from UCP 600, which governs commercial credits.
An irrevocable bank undertaking to pay a seller against presentation of documents that comply with the credit's terms. Governed by ICC UCP 600.
An undertaking given to a carrier or counterparty to release cargo without original bills of lading, indemnifying it against resulting claims. Common in shipping and commodity trades.
A guarantee that compensates the beneficiary if a contractor fails to perform its contractual obligations. Usually 5–15% of contract value.
A guarantee allowing early release of retention amounts withheld under a construction or supply contract, while preserving the employer's recourse for defects.
A credit drawn only on the applicant's default, functioning economically like a guarantee but documented as a letter of credit. Governed by ISP98 or UCP 600.
The ICC Uniform Customs and Practice for Documentary Credits, the standard rulebook applied to commercial letters of credit worldwide.
The ICC Uniform Rules for Demand Guarantees, the standard rules for independent demand guarantees. Sets out presentation, examination and payment mechanics.
The process of collecting investor orders at indicated price levels to establish the final size and spread of a new bond issue.
The periodic interest paid on a bond, expressed as an annual percentage of nominal value. Fixed, floating or zero, depending on the structure.
A bond issued in a currency other than that of the market where it is sold, typically settled through Euroclear or Clearstream and often listed in Luxembourg.
A bond whose proceeds are ring-fenced for environmentally beneficial projects, usually under a published framework with a second-party opinion. Frequently listed on the Luxembourg Green Exchange.
The dedicated Luxembourg Stock Exchange platform for green, social and sustainability-linked securities, requiring published use-of-proceeds and reporting commitments.
A renminbi-denominated bond issued in mainland China by a non-Chinese issuer. The mirror image of a Dim Sum bond, which is issued in offshore CNH.
A bond or note sold to a small group of institutional investors without a public offering, with lighter disclosure and faster execution than a benchmark deal.
The yield premium a bond pays over a benchmark such as mid-swaps or a government curve, expressed in basis points and reflecting credit and liquidity risk.
A bond whose coupon steps up or down according to the issuer's achievement of predefined sustainability performance targets. Proceeds are not ring-fenced, unlike a green bond.
The group of banks jointly underwriting and distributing an issue, led by bookrunners and supported by co-managers.
An additional tranche of an existing bond, issued on the same terms and fungible with the original, used to raise incremental funding without a new documentation cycle.
The time remaining until a bond or loan matures. A primary driver of both pricing and investor demand.
A facility between a single lender and a single borrower, documented privately and typically faster to agree than a syndicated deal.
A facility shared among a small group of relationship banks on equal terms, without a broad syndication or public distribution.
The bank administering a syndicated facility after signing: it handles drawdowns, interest calculations, payments and lender communications.
A contractual test, such as leverage or interest cover, that a borrower must satisfy at set dates. Breach typically constitutes an event of default.
A committed line that can be drawn, repaid and redrawn during its availability period. Priced with a commitment fee on undrawn amounts.
The entity holding collateral on behalf of a lender group and enforcing it on their instruction if the borrower defaults.
A facility drawn once or in tranches and repaid on an agreed amortisation or bullet schedule.
The EU Alternative Investment Fund Managers Directive, which requires an authorised depositary for each alternative investment fund and defines its oversight duties.
Holding client financial instruments separately from the bank's own assets so they are identifiable and ring-fenced in an insolvency.
The regulated entity responsible for safekeeping a fund's assets, monitoring its cash flows and verifying ownership. Mandatory for UCITS and AIFs.
An independent party holding funds or documents and releasing them only when agreed conditions are met. Used at M&A closings and in staged investments.
An International Central Securities Depository, such as Euroclear or Clearstream, which settles and safekeeps international securities.
The per-unit value of a fund's assets less liabilities, calculated at each valuation point and subject to depositary oversight.
The function maintaining a fund's investor register and processing subscriptions, redemptions and transfers.
Undertakings for Collective Investment in Transferable Securities: the EU retail fund framework whose authorisation passports across the Union.
Recovering tax deducted at source on cross-border dividends and interest under an applicable double tax treaty, typically administered by the custodian.
The Cross-Border Interbank Payment System, China's renminbi clearing and settlement infrastructure for cross-border RMB payments.
CNH is offshore renminbi, freely tradable outside mainland China; CNY is onshore renminbi, traded within the mainland regime. The two can trade at different rates.
An arrangement under which one bank holds accounts for another to execute payments and settlements in a market where the second has no direct presence.
The structured messaging standard progressively replacing SWIFT MT formats, carrying richer remittance and party data.
A nostro is the bank's own account held with a correspondent abroad; a vostro is a correspondent's account held on the bank's books. Two views of one relationship.
The Single Euro Payments Area, standardising euro credit transfers and direct debits across participating European countries.
The Business Identifier Code addressing a financial institution on the SWIFT network. Everbright Bank Europe's BIC is EVERLULL.
The international capital and liquidity standards, implemented in the EU through the Capital Requirements Regulation and Directive.
The Commission de Surveillance du Secteur Financier, the Luxembourg financial regulator that authorises and supervises Everbright Bank Europe.
The right of a bank authorised in one EEA member state to provide services throughout the EEA without separate authorisation in each country.
The Fonds de Garantie des Dépôts Luxembourg, the Luxembourg deposit guarantee scheme covering eligible deposits up to €100,000 per depositor.
Know Your Customer and Anti-Money Laundering: the identification, verification and ongoing monitoring obligations imposed on banks by EU directives and CSSF circulars.
The Legal Entity Identifier, a 20-character global code identifying a party to a financial transaction. Everbright Bank Europe's LEI is 22210018MLEVW7CTGU78.
The public disclosure of a bank's capital, risk exposures and risk management under the Basel framework's market-discipline pillar.
The natural person who ultimately owns or controls a legal entity. Identifying the UBO is a mandatory step in onboarding.
