Industry roll up

Special type of horizontal merger. In a roll up, the consolidator acquires a chunk of small companies with similar operations. Roll ups generally occur in fragmented industries with small, yet mature firms. The goal of the roll up is to achieve economies of scale in purchasing, marketing, information systems, logistics, distribution, and top management.

Similar financial terms

The Securities Industry Protection Corporation
Commonly named the SIPC. Provides up to $500,000 insurance protection for your U.S. stock brokerage account.

Most term loans in the Euromarket are made on a rollover basis, which means that the loan is periodically repriced at an agreed spread over the appropriate, currently prevailing LIBOR rate.

Roll over
Reinvest funds received from a maturing security in a new issue of the same or a similar security.

Risk controlled arbitrage
A self-funding, self-hedged series of transactions that generally utilize mortgage securities as the primary assets.

On a roll
Doing well, moving forward

Controlled disbursement
A service that provides for a single presentation of checks each day (typically in the early part of the day).

The corporate manager responsible for the firm's accounting activities.

Controlled Foreign Corporation (CFC)
An offshore company which, because of ownership or voting control of U.S. persons, is treated by the IRS as a U.S. tax reporting entity. IRC 951 and 957 collectively define the CFC as one in which a U.S. person owns 10 percent or more of a foreign corporation or in which 50 percent or more of the total voting stock is owned by U.S. shareholders collectively or 10 percent or more of the voting control is owned by U.S. persons.

Coupon rate
The interest rate that the issuer of a bond agrees to pay each year to the bondholder. The coupon rate multiplied by the principal of a bond provides the nominal amount of the coupon. For example, a bond with a 5.1% coupon rate and a principal of $1,000 provides an annual interest of $51. The coupon rate is also referred to as the nominal rate.

The annual amount of the interest payment made to owners during the term of the bond.

Zero-coupon bonds
The holder of a zero-coupon bond realizes interest by buying the bond at a discount to its principal value. These bonds made their debut in the U.S. bond market in the early 1980s.

Deferred-coupon bonds
Bonds that let the issuer avoid using cash to make interest payments for a specified number of years. There are three types of deferred-coupon structures: (a) deferred-interest bonds, (b) step-up bonds and (c) payment-in-kind bonds.

When the most recent movement in the price of a stock was an increase.

The SuperMontage is NASDAQ's trading system to aggregate quotes and orders, providing access to more possible trades. Launched in 2002, SuperMontage is a fully integrated order display and execution system, capable of handling an expanded universe of orders. The key features include pre-trade anonymity, the ability to aggregate interest five price levels deep on each side of the market, internalization of orders still available, time stamps of individual orders to preserve position and priority, ...

Up on Unusual Volume
Refers to an increase in stock price for stocks exhibiting unusual volume.

Zero-coupon interest rate
The interest rate that would be earned on a bond that provides no coupons.

Up-and-Out Option
An option that ceases to exist when the price of the underlying asset increases to a set level.

Up-and-In Option
An option that comes into existence when the price of the underlying asset increases to a set level.

Step-up swap
A swap where the principal increases over time in a predetermined way.

Cuban Peso from Cuba.

Zero-coupon convertible
A zero-coupon bond convertible into the common stock of the issuing company after the stock reaches a certain price, using a put option inherent in the security. It might as well refer to zero-coupon bonds, which are convertible into an interest bearing bond at a certain time before maturity.

Group of 100
Prestigious cross-functional group of accounting profession thought leaders in the US. The group meets periodically to identify future trends and hot issues. Their output and decisions are analyzed and prioritized by the Strategy Working Group, which determines what projects should be implemented in order to address trends and issues for the benefit of the profession.

This occurs when someone is unable to pay their debts and creditors move to secure what monies they can from any existing assets (property) held by that person. All property is then administered by the official receiver. A bankrupt - if still able to work - will only receive an allowance to live on after payments are made to creditors

Weighted average coupon
The weighted average of the gross interest rate of the mortgages underlying the pool as of the pool issue date, with the balance of each mortgage used as the weighting factor.

Visible supply
New muni bond issues scheduled to come to market within the next 30 days.

Upstairs market
A network of trading desks for the major brokerage firms and institutional investors that communicate with each other by means of electronic display systems and telephones to facilitate block trades and program trades.

Take-up fee
A fee paid to an underwriter in connection with an underwritten rights offering or an underwritten forced conversion as compensation for each share of common stock he underwriter obtains and must resell upon the exercise of rights or conversion of bonds.

Support level
A price level below which it is supposedly difficult for a security or market to fall.

Supply shock
An event that influences production capacity and costs in an economy.

Provision in a company's charter requiring a majority of, say, 80% of shareholders to approve certain changes, such as a merger.

Step-up bond
A bond that pays a lower coupon rate for an initial period which then increases to a higher coupon rate.

To increase, as in step up the tax basis of an asset.

Selling group
All banks involved in selling or marketing a new issue of stock or bonds.

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.

Pure yield pickup swap
Moving to higher yield bonds.

Prepackaged bankruptcy
A bankruptcy in which a debtor and its creditors pre-negotiate a plan or reorganization and then file it along with the bankruptcy petition.

The gain in yield that occurs when a block of bonds is swapped for another block of higher-coupon bonds.

The loss of cash resulting from a swap into higher price bonds or the need/willingness of a bank or other borrower to pay a higher rate of interest to get funds.

Pass-through coupon rate
The interest rate paid on a securitized pool of assets, which is less than the rate paid on the underlying loans by an amount equal to the servicing and guaranteeing fees.

Money supply
M1-A: Currency plus demand deposits
M1-B: M1-A plus other checkable deposits
M2: M1-B plus overnight repos, money market funds, savings, and small (less than $100M) time deposits.
M3: M-2 plus large time deposits and term repos.
L: M-3 plus other liquid assets.

Low-coupon bond refunding
Refunding of a low coupon bond with a new, higher coupon bond.

Long coupons
(a) Bonds or notes with a long current maturity. (b) A bond on which one of the coupon periods, usually the first, is longer than the other periods or the standard period.

Lock-up CDs
CDs that are issued with the tacit understanding that the buyer will not trade the certificate. Quite often, the issuing bank will insist that the certificate be safekept by it to ensure that the understanding is honored by the buyer.

Level-coupon bond
Bond with a stream of coupon payments that are the same throughout the life of the bond.

Legal bankruptcy
A legal proceeding for liquidating or reorganizing a business.

(a) When bond yields and prices fall, the market is said to back-up. (b) When an investor swaps out of one security into another of shorter current maturity he is said to back up.

State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from the stockholders to the bondholders.

Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other benefits from leverage so that the optimal amount of leverage is less than 100% debt finaning.

Bankruptcy risk
The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.

Bankruptcy view
The argument that expected bankruptcy costs preclude firms from being financed entirely with debt.

Bottom-up equity management style
A management style that de-emphasizes the significance of economic and market cycles, focusing instead on the analysis of individual stocks.

Coupon equivalent yield
True interest cost expressed on the basis of a 365-day year.

Coupon payments
A bond's interest payments.

Current coupon
A bond selling at or close to par, that is, a bond with a coupon close to the yields currently offered on new bonds of a similar maturity and credit risk.

Keep up with the Jones
Strive, especially beyond one's income to socialize and spend like others in the same neighborhood.

Basel Committee on Banking Supervision
A committee that meets under the auspices of the Bank for International Settlements in Basel, Switzerland to set bank regulatory standards.

Give up
Used for listed equity securities. a) Term used in a securities transaction involving three brokers, as illustrated by the following scenario: Broker A, a floor broker, executes a buy order for broker B. (Another member firm broker who has too much business at the time to execute the order.) The broker with whom broker A completes the transaction (the sell side broker) is broker C. Broker A "gives up" the name of broker B, so that the record shows a transaction between broker B and broker C even ...

Focus group
A small group of people meet an interviewer to discuss a product, service or marketing policy. This provides insight into consumers` behaviours and attitudes.

The enhancement in yield or income relative to a comparable treasury instrument.

Visible Supply
Usually refers to supplies of a commodity in licensed warehouses. Often includes afloats and all other supplies "in sight" in producing areas.

Give Up
A contract executed by one broker for the client of another broker that the client orders to be turned over to the second broker. The broker accepting the order from the customer collects a wire toll from the carrying broker for the use of the facilities. Often used to consolidate many small orders or to disperse large ones.

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Net interest margin (NIM)

The difference between interest income and interest expense as a percentage of assets.

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