Forfaiting Glossary:
Definition results for your selection are shown below.
Acceptance Credit:
A Letter of Credit which includes a term bill of exchange in its required documentation. The bill will be accepted by the bank on which it is drawn and may be discounted and the proceeds paid to the beneficiary.
ACP Countries:
The 69 African, Caribbean and Pacific developing countries which have signed the fourth Lome Convention.
Advance Compensation:
A forward purchase.
Advance Payment Bond:
A guarantee to a buyer that advance payments will be repaid in the event of the seller defaulting on the contract.
Advising Bank:
Correspondent of the issuing bank to whom a Letter of Credit is sent for transmission to the beneficiary.
Agio:
The price increase over and above the market price of the traded goods and attributable to the extra costs involved in countertrading.
Amendment:
A change to the terms of a letter of credit. An amendment should begin from the applicant and follow the same path as the Letter of Credit.
Applicant:
The buyer who applies for a Letter of Credit.
Assignment of Policy:
Transferring/assigning benefits and rights under an insurance policy from the insured to a lender.
Availability:
The date by which a set of documents has to/will be delivered to the forfaiter ready for discounting.
Aval:
An unconditional, irrevocable, divisible and freely assignable/transferable guarantee to pay on the due date, normally associated with forfaiting.
Avalor:
An institution or person acting as a guarantor.
Average Life:
The average life refers to an evaluation of the average time an asset will be outstanding given a specific repayment stream.