Letter Of Guarantee - Contract issued by a bank for a customer who formally agrees to purchase goods from a supplier with a promise to fulfill financial obligations in case of default. - Document issued by bank for a call writer confirming that writer owns the underlying asset … [Read more...]
Letter Stock
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Letter Stock Common stock placed privately. Referred to in this manner because of a SEC rule calling for a written statement from the buyer saying that it is not purchased for resale purposes. … [Read more...]
Level-Coupon Bond
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Level-Coupon Bond A bond that assures a flow of coupon payments that remain equal throughout the bond’s life until maturity. … [Read more...]
Leverage
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Leverage The use of debt financing or use of fixed costs to enhance the return from investment. … [Read more...]
Leverage Build Up
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Leverage Build Up Addition of debt to enter a position with potential for large returns. Involves exposure to leveraged positions for the opportunity to enhance magnify returns. … [Read more...]
Leverage Clientele
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Leverage Clientele A shareholders group that, owing to their personal leverage, seeks to invest in companies that maintain corporate leverage that is compatible. … [Read more...]
Leverage Ratios
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Leverage Ratios Tool to evaluate the relative contribution of creditors and stockholders and the ability of the firm to meet financing charges. Can be described as the value of firm's total debt to the total value of the business. … [Read more...]
Leverage Rebalancing
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Leverage Rebalancing Undertaking transactions to rebalance or adjust the leverage ratio of a firm back to the target levels. … [Read more...]
Leveraged Beta
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Leveraged Beta Beta adjusted for the proportion or degree of leverage in the capital structure of the firm or the beta of a leveraged minimum expected return. … [Read more...]
Leveraged Buyout (LBO)
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Leveraged Buyout (LBO) An arrangement by which a transaction is undertaken to take a public corporation private. Debt such as bank bonds and loans are used for this purpose. Owing to the large proportion of debt as compared to equity in the new entity, the bonds issued are … [Read more...]
Leveraged Equity
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Leveraged Equity The stock of a company that depends on financial leverage. These stock holders derive the costs and benefits and costs of using debt and also face the same risks. … [Read more...]
Leveraged ETF
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Leveraged ETF ETF (exchange-traded fund) that amplifies the returns of an underlying index by using financial derivatives and debt. The strategy used is to maintain a constant leverage during the investment period, such as 2:1 or 3:1 ratio. … [Read more...]
Leveraged Lease
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Leveraged Lease An arrangement for a lease where the lessor borrows a large portion of the amount needed to buy the asset. In exchange he grants the creditor a lien on the same assets and a pledge of the repayments secure the loan. … [Read more...]
Leveraged Portfolio
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Leveraged Portfolio Portfolio where some assets are risky ones that have been financed through borrowings. … [Read more...]
Leveraged Required Return
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Leveraged Required Return The return that is required to be derived from an investment when the investment is funded by debt to some extent. … [Read more...]
Liability
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Liability A cash payment or financial obligation that is made at a given time to fulfill an obligation’s terms of contract. … [Read more...]
Liability Funding Strategies
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Liability Funding Strategies Investing strategy that selects assets in such a manner that cash flows from these equal or exceed the obligations of the client. … [Read more...]
Liability Swap
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Liability Swap Technique used to align liabilities of a firm with its assets. An interest rate swap is used to restructure the liabilities’ cash flow characteristics to do this. … [Read more...]
LIBOR
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LIBOR The rate of interest that is charged by major international banks located in London for borrowings from each other. Stands for London Interbank Offered Rate. Several variable rates of interest in the U.S. are dependent on spreads off of this rate. Several different LIBOR … [Read more...]
Letter of Comment
Letter of Comment SEC letter outlining changes in the registration statement of a firm. … [Read more...]