Agent:

A person acting on behalf of another who is referred to as a principal.

Agent Bank:

See Calculation Agent description below.

Amortisation:

Gradual repayment of debt over a period of time, possibly through the operation of a sinking or purchase fund.

Arbitrage:

Simultaneous sale and purchase of like financial instruments in order to profit from differences between usual price relationships.

Bearer Bond:

A bond which treats the holder of the Bond as the rightful owner.

Bond:

A negotiable instrument evidencing indebtedness. A legal contract issued by a company promising to pay the holder its face value, plus specified amounts of interest on certain future dates.

Book entry security:

A security that is not represented by a global or definitive bond or certificate. Ownership is evidenced by book entry only in the books of the issuer and/or of a clearing or depositary organization.

Book entry system:

Securities recorded in electronic form either not represented or traded in certificate form but by entries in a clearing system.

Calculation Agent:

Responsible for calculating the rate of interest payable on Floating Rate bond issues, where the interest payable is based on and calculated with reference to a specific published rate plus a margin. Once the calculation has been completed details are provided to Euroclear, Clearstream and the relevant stock exchange.

Call:

The optional right of an issuer to redeem bonds before their stated maturity, at a given price on a given date.

Call Option:

The right of the issuer to redeem outstanding bonds before their scheduled maturity. The first dates when an issuer may call bonds will be specified in the prospectus relating to the issue.

Clearstream:

One of two major organisations in the Eurobond market which clears, or handles the physical exchange of, securities and is also responsible for the storing of securities. Headquartered in Luxembourg, the company is owned by a number of banks and operates through a network of agents.

Closing date:

The date on which new issue proceeds are paid to the issuer and the securities are delivered to the investors by the issuer. This is generally 10 to 15 days after launching the transaction and after the signing of the issuers subscription agreement.

Common Code:

A code assigned to a new issue, this identification code is common to both Euroclear and Clearstream and is used to identify a security in each of their systems.

Common Depositary:

An entity appointed by both Euroclear and Clearstream (the International Central Securities Depositaries ('ICSD's')) as sub-custodian/ safe keeping agent to hold the physical global notes representing a bond issue.

Conversion Agent:

Responsible for the exchange of a convertible bond into a fixed number of shares of the issuing company's stock. The terms and conditions of the exchange parameters will be documented in the prospectus covering the issue.

Convertible:

A debt instrument which gives the holder the option to acquire shares in the issuing company.

Coupon:

The nominal amount of interest expressed as a percentage of principal value, payable to the holder of a fixed income debt obligation. A coupon can also be used to describe a certificate attached to a bearer security due on a specified date.

CUSIP Number:

The number used to identify all stocks and registered bonds settled and held in the Depositary Trust Company of New York (DTC), using the 'Committee on Uniform Securities Identification Procedures' (CUSIP).

Custodian:

A bank or other financial institution that safe keeps bond certificates and other assets on behalf of its clients.

Dealer:

An institution, which buys and sells financial instruments, including bonds, which it owns for its own account.

Debt service:

Payments of interest and principal required on a debt over a specified period.

Delivery versus Payment (DVP):

A delivery of securities to a designated recipient against receipt of payment. Also read Free of Payment (FOP).

Due date:

The date on which payment of interest or principal becomes due and is payable.

Escrow/Collateral Agent:

Holds money, securities, or other property or instruments on behalf of a third party until the conditions of a contract are met.

Eurobonds:

Bonds issued, by a borrower, in a foreign country, denominated in a Eurocurrency (e.g. US-Dollar, Canadian Dollar, Yen, Euro, Sterling), underwritten and sold by an international syndicate of banks.

Euroclear:

One of the two major organisations in the Eurobond market which clears, or handles the physical exchange of, securities. Based in Brussels, the company recently became a Bank, prior to becoming a Bank Euroclear was operated under contract by Morgan Guaranty Trust Company of New York.

Euro Commercial Paper ("ECP"):

Is an unsecured form of promissory note issued in discounted or interest bearing form. The tenor for ECP can be anything between 1 day and 270 days (as detailed in the governing documentation), although average tenor is 90-180 days. ECP programmes are favoured by companies for short-term capital raising as they represent a flexible, cost effective platform for fund raising.

Euro Medium Term Notes ("EMTN"):

Debt instruments with maturities ranging from one to twelve months listed on either the London and/or Luxembourg stock exchanges.

Fixed rate of interest:

Interest on a security fixed at its outset and detailed in the Offering Circular. Confirming a specified percentage based on the principal amount and paid at the end of specified interest periods (i.e. annually, semi-annually, or quarterly until maturity).

Fixing:

The determination of the interest rate on a floating rate security, this function is undertaken by the Agent Bank (also known as the Calculation Agent) and normally completed two business days prior to the beginning of a new interest period.

Floating or variable Rate interest:

Interest on an issue of securities, which is not fixed at the outset of the issue, but periodically calculated by an agent bank using a formula specified in the terms and conditions of the issue.

Free delivery or free of payment:

Payment for a security which is not conditional upon the simultaneous delivery of the securities. Please also refer to the Delivery versus Payment description.

Global Bond:

International issue placed at the same time in the European and one or more domestic markets with securities fungible between the markets.

Indenture:

A formal agreement between an issuer of bonds and an institution (appointed as Trustee) who represents the interests of the holders. The agreement will document the form of the notes, amount issued, protective covenants and the duties and obligations of the Trustee.

Information Memorandum:

A publicly available document, more commonly used in documentation for Euro Medium Term Note ('EMTN') and Euro Commercial Paper ('ECP') Programmes, providing an overview of the programme structure, including a comprehensive description of the issuer, together with details of its historical and financial statements.

Interest Coupon:

The amount due to investors in a bond, as documented in the prospectus, payable in line with a particular transactions terms and conditions, either on a fixed or floating rate basis.

Investment bank :

A financial institution active in the management and underwriting of new securities, as well as securities trading and distribution.

ISIN Code:

The International Securities Identification Number used throughout the capital markets to identify a specific transaction. This alphanumeric is coded to distinguish between international and domestic transactions.

Issuer:

Any corporation, supranational, financial institution or governmental entity which borrows money through the sale of securities.

Lead-manager :

The financial institution responsible for initiating a transaction with a borrower and for organising the successful syndication and placement of the transaction in the primary markets.

Luxembourg Listing and Paying Agent:

A bank appointed to co-ordinate the listing of new transactions with the Luxembourg Stock Exchange. The bank must be a member of the Luxembourg Stock Exchange and needs to be able to also provide Luxembourg Paying Agency services. The Bank of New York (Luxembourg) S.A. is a member of the Luxembourg Stock Exchange and active in the provision of both listing and paying agency services in Luxembourg.

Mandate:

Appointment and authorisation from an issuer to proceed with a new transaction on terms agreed with the lead manager.

Maturity:

The date on which a debt security becomes repayable.

Money market:

The market for the sale and purchase of short-term financial instruments. Short term is normally defined as having a tenor of less than a year.

Offering Circular:

A publicly available document providing an overview of a securities issue, including a comprehensive summary of the terms and conditions of an issue. The document also provides a description of the issuer, as well as details of its historical and financial statements. This document can also be referred to as a prospectus or an information memorandum.

Pari Passu:

Generally used in the context of confirming that securities rank pari passu, i.e. equal in right of payment to another.

Paying Agent:

A bank appointed as intermediary between the issuer and their investors to co-ordinate the payment of interest and principal on an issue.

Permanent Global Bond:

One bond representing the entire issue of a certain security (with individual certificates printed in certain specific circumstances). Global bonds reduce printing and storage costs and are used to facilitate the payment of interest and principal to all investors.

Primary market:

The market relating to the initial issue/ sale of securities.

Private placement:

Targeted at a small group of investors it may involve a single manager and a single investor. The types of securities and the manner of the offer is generally similar to other types of Euromarket placements.

Project finance:

Advice on and provision of financing for infrastructure and public works projects, often in emerging markets.

Prospectus or Offering Circular:

A document providing an overview of an issuance of securities including a summary of the terms of the issue and a description of the issuer along with details on its most recent financial statements. Copies of the prospectus are circulated and approved by the appropriate legal authorities and stock exchange as part of the issuance process. Prospective investors will also receive copies.

Public offering:

An offering for sale of a new issue of securities to the general public which involves the listing of a transaction on a Stock Exchange.

Put:

A contract allowing the holder to redeem a given number of securities at a fixed price during a period of time specified in the prospectus.

Put Option:

A bondholders right to redeem a bond at specified intervals before maturity. The bondholders may be allowed to put bonds back to the issuer on one or more occasions during the life of an issue as defined in the prospectus.

Rating:

A letter grade signifying a security's investment quality, graded to reflect the strength of a company's management, its financial position and likelihood to default. The main rating agencies are Moody's and Standard & Poors.

Record Date:

The date on which a Bondholder must officially own a bond in order to be entitled to interest.

Redemption:

Redeeming a debt security through a cash payment by the issuer to its investors. The contractual right of an issuer to exercise optional early redemption is also known as a call (please see earlier description).

Redemption date:

The day on which the issuer will make cash payment to the investors to redeem the security.

Registrar:

Responsible for keeping track of the owners of registered bonds. The Registrar, working with the Transfer Agent, keeps files of the owners of a registered bond issue. The Registrar also certifies that a bond is a company's genuine debt obligation.

Regulation S:

Regulation S simplifies the restrictions on offering and selling bonds in the United States or to US persons by making it clear that for securities law purposes a 'US person' is defined as a resident of the United States, rather than a US citizen located anywhere in the world.

Retire:

To extinguish a debt obligation, either by repayment, prepayment, or early redemption.

Rule 144A:

Rule 144A applies to the resale of securities in the US to 'qualified institutional buyers' (QIBs). QIB's generally include insurance company's, pension funds and investment funds.

Secondary market:

The market for trading bond securities after their primary distribution. These securities can also be referred to as 'seasoned'.

Settlement:

The completion of a trade through the exchange of instructions to deliver securities to the investor and the related cash payment to the issuer.

Settlement date:

The date on which a transaction is completed and cleared, i.e. payment is effected and securities are delivered.

Subscription Agreement:

An agreement for the underwriting of a new issue between the issuer and the collective managers (or lead managers). Also known as the dealer agreement.

Syndicate:

A group of banks working together to successfully underwrite and distribute a new securities issue.

Talon:

Provides for the issuance of further coupons on definitive note issues with a high number of interest payments.

Tap issue:

The reopening of an existing debt security, which increases the nominal amount outstanding, all other terms and conditions remain the same.

Temporary Global Bond:

A temporary certificate representing the whole of an issue of debt instruments, created to control distribution of an issue in the primary market. This is generally done to comply with particular legal restrictions.

Tender/ Exchange Agent:

A bank appointed to co-ordinate the exchange of existing bonds for new bonds with differing terms and conditions. This bank is the intermediary responsible for receiving details of investors exchanging their holdings in original bonds and ensuring they receive new bonds. This bank interacts with the issuer, lead manager underwriting the new bonds, Euroclear and Clearstream and in certain instances the investors themselves.

Trust Deed:

A contract defining the obligations of an issuer and appointing a trustee to represent and protect the interests of bondholders. The English law equivalent of an Indenture. See Indenture.

Warrant:

A certificate attached to a debt security, giving the holder the right to purchase the borrower's common stock at a set price over a given time period until or beyond the debt security's maturity.

Withholding tax:

A tax deducted at source by the paying agent prior to payment to the investors. In certain instances the paying agent is legally obliged to deduct tax on interest and dividends. However, persons or institutions residing outside the country levying the tax are not subject to withholding.

Yankee Bond:

Issue in U.S. dollars by a non-U.S. borrower, underwritten by a predominantly U.S. syndicate and generally managed by a U.S. investment bank.

Yield:

Rate of return on a security as determined by its coupon and other characteristics, expressed as a percent and annualised.

Zero Coupon Bond

A Bond without a coupon providing interest payments. Zero coupon bonds have an issue price well below 100% with repayment on maturity at face value or par.