Forfaiting Glossary:
Glossary items beginning with: d
D/A:
Documents against acceptance. The commercial documents will be released to the drawee against acceptance of the term Bill of Exchange accompanying them.
D/P:
Documents against payment. The documents will be released to the drawee against payment.
Days of Grace:
The quote of a Forfaiter will often state a number of days of grace which reflect the number of days’ delay normally experienced in the transmission of payments applicable to the country risk involved.
Deferred Letters of Credit:
A credit calling for payment at a determinable future date without requiring a draft to accompany the documents.
Discount Rate:
The rate by which the face value of a negotiable instrument is discounted. The discount rate is generally calculated as either a discount to yield or straight discount.
Discount to Yield:
Expresses the discount rate as a true interest cost, on a per annum basis, in most cases, maturities exceeding 180 days will be subject to semi-annual compounding. The Discount to Yield calculation is the yield a present value will achieve as it reaches its future value (face value) at maturity.
Discounting:
The purchase of accepted term Bills of Exchange or other instruments of payment at a discount to allow for the cost of interest on the funds until the bills mature.
Discrepancy:
Where documents presented to a bank under a letter of credit do not conform with the terms of the credit.
Dishonour:
Refusal to accept or pay a Bill of Exchange.
Documentary Collection:
One which entails commercial documentation and is concerned with goods.
Draft:
See Bill of Exchange.
Drawee:
The party on whom a Bill of Exchange is drawn. In a collection, it is the buyer.