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Funding risk |
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Funding riskRelated: Interest rate riskFunding risk Similar MatchesMinimum funding requirementMinimum funding requirementA rule introduced in the wake of the Maxwell pensions scandal which was intended to ensure that company pensions funds always had enough assets to pay out their liabilities (i.e. pensions to retired members of the scheme).The legislation uses the yield from long term gilts as the yardstick by which a pensions fund's liabilities are measured. To stay within the rules, funds have felt obliged to buy these long-term bonds, with the result that their price has gone sky high.One alternative being considered is to change the whole way liabilities are valued and, in effect, to allow the funds to invest in more exciting securities than gilts, but to couple this with an insurance fund that bails out those funds that are unable to meet their liabilities. This insurance fund would be called the Central Discontinuance Fund (CDF). Private Export Funding Corporation (PEFCO)Private Export Funding Corporation (PEFCO)Company that mobilizes private capital for financing the export of big-ticket items by US firms by purchasing at fixed interest rates the medium- to long-term debt obligations of importers of US products. Equity fundingEquity fundingAn investment consisting of a life insurance policy and a mutual fund. The insurance policy is paid by the collateral value of fund shares, give the investor the advantages of insurance protection with the growth potential of a mutual fund. High coupon bond refundingHigh coupon bond refunding../../finance-glossary/ a high-coupon bond with a new, lower-coupon bond. Evergreen fundingEvergreen fundingA British term referring to the gradual injection of capital into a new or existing enterprise. Further SuggestionsResolution Funding Corporation (RefCorp)Senior refunding Junior refunding Net advantage of refunding Funding Low coupon bond refunding Prerefunding Advance refunding Refunding Stopping curve refunding rate |
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