Financial term of the day, Monday 25th of May 2015:

Smithsonian agreement

A revision to the Bretton Woods international monetary system which was signed at the Smithsonian Institution in Washington, D.C., U.S.A., in December 1971. Included were a new set of par values, widened bands to +/- 2.25% of par, and an increase in the official value of gold to US$38.00 per ounce.

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Smithsonian agreement
A revision to the Bretton Woods international monetary system which was signed at the Smithsonian Institution in Washington, D.C., U.S.A., in December 1971. Included were a new set of par values, widened bands to +/- 2.25% of par, and an increase in the official value of gold to US$38.00 per ounce.

No-shop agreement
The target company involved in merger or acquisition agrees not to consider other offers while negotiating with a particular bidder.

Tolling agreement
An agreement to put a specified amount of raw material per period through a particular processing facility. For example, an agreement to process a specified amount of alumina into aluminum at a particular aluminum plant.

Throughput agreement
An agreement to put a specified amount of product per period through a particular facility. For example, an agreement to ship a specified amount of crude oil per period through a particular pipeline.

Tax clawback agreement
An agreement to contribute as equity to a project the value of all previously realized project-related tax benefits not already clawed back to the extent required to cover any cash deficiency of the project.

Standstill agreements
Contracts where the bidding firm in a takeover attempt agrees to limit its holdings another firm.

Standby agreement
In a rights issue, agreement that the underwriter will purchase any stock not purchased by investors.

Sale and lease-back agreement
Sale of an existing asset to a financial institution that then leases it back to the user.

Revolving credit agreement
A legal commitment wherein a bank promises to lend a customer up to a specified maximum amount during a specified period.

Repurchase agreement
An agreement with a commitment by the seller (dealer) to buy a security back from the purchaser (customer) at a specified price at a designated future date. Also called a repo, it represents a collateralized short-term loan, where the collateral may be a Treasury security, money market instrument, federal agency security, or mortgage-backed security. From the purchaser (customer) perspective, the deal is reported as a reverse Repo.

Raw material supply agreement
As used in connection with project financing, an agreement to furnish a specified amount per period of a specified raw material.

Purchase agreement
As used in connection with project financing, an agreement to purchase a specific amount of project output per period.

Preferred stock agreement
A contract for preferred stock.

Note agreement
A contract for privately placed debt.

Bond agreement
A contract for privately placed debt.

Cash deficiency agreement
An agreement to invest cash in a project to the extent required to cover any cash deficiency the project may experience.

Concession agreement
An understanding between a company and the host government that specifies the rules under which the company can operate locally.

Did you know?

Effective gross income

Normal annual income including overtime that is regular or guaranteed. The income may be from more than one source. Salary is generally the principal source, but other income may qualify if it is significant and stable.


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