Evolving Debt Finance Practices for Surface Transportation (2017) / Chapter Skim
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Pages 27-44
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28 Glossary of Key Terms This glossary includes common public finance terminology, terminology specific to transportation capital investments, and terminology relevant to federal legislation and programs. a Ad valorem tax: A tax based on property value.
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29 Average life: With respect to an issue of bonds, the weighted period of time required to repay half of the issue through scheduled principal payments. The average life, also referred to as the "weighted average life" or "weighted average maturity" or "WAM," is a reflection of the rapidity with which the principal of an issue is expected to be paid.
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30 Budget authority: Authority provided by law to enter into financial obligations that will result in immediate or future outlays of federal government funds. Budget authority includes the credit subsidy costs for direct loan and loan guarantee programs.
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31 Closing: The procedure by which a sale between the issuer and the buying group is completed. It is at the closing that the issuer delivers the securities to the buyers and the issuer receives the proceeds from the sale of securities.
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32 modification on marketable Treasury securities with a similar maturity to the remaining maturity of the direct guaranteed loans, under premodification or postmodification terms, whichever is appropriate. Current yield: The ratio of interest to the market price of a bond.
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33 Direct loan: A disbursement of funds by the government to a nonfederal borrower under a contract that requires repayment of such funds with or without interest. The term includes the purchase of, or participation in, a loan made by a nonfederal lender.
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34 Financial Industry Regulatory Authority (FINRA) : An independent, not-for-profit organization authorized by Congress to protect America's investors by making sure the broker–dealer industry operates fairly and honestly.
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35 I Indemnification: The assumption by one party to a securities transaction of responsibility to pay or reimburse the costs, expenses, and other liabilities incurred by another party for certain specifically enumerated events or occurrences. Indenture: A contract between the issuer of municipal securities and a trustee for the benefit of the bondholders.
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36 Issue: A specific group of securities issued by an issuer. Issuer: The public entity borrowing money through the issuance of securities.
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37 Liquidation: Process of converting collateral to cash. Liquidity: Refers to an investor's ability to sell an investment as a means of payment or easily convert it to cash without risk of loss of nominal value.
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38 Moral obligation bond: A municipal security that does not have the backing of the full faith and credit of the issuer but that has means of payment morally (as opposed to legally) obligated to it.
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39 obligation authority often refers to the amount of federal aid obligation limitation (established annually by Congress in appropriation acts) that is allocated to the states and that controls the amount of apportioned contract authority that can be obligated by the states in a given fiscal year.
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40 Point: One percent (1%) of the face value of a bond.
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41 r Ramp-up phase: The phase in a project's life cycle immediately following construction. It is during this phase, the early years of operation, that a project's revenue stream is established.
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42 Senior debt or senior lien bonds: Debt obligations having a priority claim on the source of payment for debt service. Serial bonds: Bonds that are scheduled to mature over a number of years (as distinct from term bonds)
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43 with the issuance of one or more series of additional bonds under the master or bond contract. In some cases, a supplemental indenture amends terms of the master or bond contract without providing for the issuance of additional bonds.
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44 Turnkey: A generic term for a variety of public–private partnership arrangements, whereby a public sector entity awards a contract to one or more private firms to undertake the development, construction, or operation of an infrastructure project for a predetermined period of time before turning the project back over to the public entity. Turnkeys may take various forms, including design–build–transfer and build–operate–transfer.
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45 Yield to maturity: The average annual percentage of return on a security assuming the interest is reinvested at the same yield and the security is held to maturity. Z Zero coupon bond: A bond that is originally issued at a deep discount from its par or face amount and that bears no current interest.
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Key Terms
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