GFKL-Glossary

In ABS/ABCP transactions, payment claims are securitized as tradable bonds (securities or commercial papers) emitted by a financing company (Special Purpose Vehicle or Spv). The bonds emitted by the Spv are redeemed at maturity using the cash flow from the receivables called in. Asset-backed commercial papers generally have shorter terms and are traded on
international money markets, whereas asset-backed securities mostly have a term of more than one year and are traded on the international capital markets.

ABCP program sponsored by the Royal Bank of Scotland PLC.

The cash value is the current total value of a series of future payments (using the discounting interest rate). The cash value concept is frequently used in investment accounting.

Flow of liquid funds generated by operating activities.

ABCP program sponsored by the WESTLB AG.

Corporate governance refers in particular to the way in which the management organs (Executive Board, Supervisory Board) function and to the collaboration and behavior of these organs. The company’s behavior as regards communication and transparency is also of crucial importance for the evaluation of the company with regard to responsible, value chain oriented company management and supervision.

Financial audit of a company, for example in the case of a takeover or merger. Now increasingly often supplemented by examination of the company environment. This so-called extended due diligence (pre due diligence) also examines the company’s customers, markets, technologies and legal parameters.

Financing transaction in which receivables are sold to a financial institution specializing in the acquisition of receivables.

Selling receivables for refinancing purposes. Here the receivables purchaser forgoes his right of recourse from the seller.

ABCP program sponsored by the State Street Bank GmbH.

Securitization transactions carried out as part of risk management into order to limit risks arising from interest and exchange rate changes.

Abbreviation of International Financial Reporting Standards. A code of accounting practice published by the International Accounting Standards Board (IASB) with the character of nonstatutory recommendations. The aim of the IASB is to harmonize international accounting regulations by formulating and publishing international accounting standards and making them as widely accepted as possible.

Investor relations is the purposeful, strategic management of relations between a company and the individual members of the financial community, and covers the sum of all measures and decisions taken to maintain relations with existing shareholders and to acquire new potential equity providers. The central focus here is the comprehensive, consistent and prompt exchange of information between the company and the financial market.

In leasing, a lessor makes over a leasing object to a lessee for the latter’s use, and receives compensation in return (usually consisting of a deposit, leasing installments and a residual value).

Business unit of UNIVERSAL LEASING GMBH: In the mid-ticket segment, an area-wide branch network is used to provide services for dealers and manufacturers relating to the sales financing of their investment objects. The nationwide distribution network in Germany offers customers tried-and-tested forms of financing for an extensive range of objects.

Unlike Leasing, the hire-purchaser and the leasing company agree at the time the agreements concluded that the title to the leasing object will pass to the hire-purchaser after the leasing installments arranged have been paid.

Business unit of UNIVERSAL LEASING GMBH: The project finance segment covers large-volume financing plans, which because of their size and the object securities on which they are based require individual refinancing sources. These are therefore customized financing solutions, also for extensive investment volumes.

Evaluation of a debtor’s creditworthiness carried out by so-called rating agencies on the basis of certain criteria. The rating scales of the most prestigious international agencies Moody’s and Standard&Poor’s range from AAA (highest credit rating) to D (debtor with payment difficulties).

Business unit of UNIVERSAL LEASING GMBH: The small-ticket segment comprises the standardized handling of small-volume financing business via an Internet platform. The simplified credit checking procedure focuses solely on object securities and credit standing. It speeds up decisions for clients while keeping transaction costs low.

ABCP program, sponsored by the ABN AMRO BANK N.V.

In risk controlling, this term describes the greatest possible loss for which a certain degree of probability exists within a defined period of time. Banks and leasing companies use the value at risk in particular for the daily measurement and limitation of risks to which assets are exposed due to changes in market prices.