Premium and RFR templates: Difference between pages

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1. ''Options.''
''Loan documentation - Loan Market Association (LMA)''.


The amount payable by the buyer of an option to the option writer for the right to deal on the terms contained in the option.
Abbreviation for Risk Free Rate templates.




2. ''Insurance.''
The RFR templates are recommended forms of loan facility agreement, referencing risk free rates.


The amount payable by an insured to the insurer in return for the protection set out in the terms of the insurance policy.
They are published by the Loan Markets Association.




3. ''Bonds.''
To assist treasurers approaching RFR-linked loans for the first time, Slaughter and May, in conjunction with the Association of Corporate Treasurers, have produced a Borrower’s Guide to the LMA’s RFR templates.  


A bond trading in the market ''at a premium'' has a market value greater than its par value.
The Guide provides background to RFR lending terms from the borrower’s point of view, alongside a detailed commentary on the interest rate and related provisions of the RFR templates, highlighting aspects that borrowers might seek to adjust or negotiate.




4. ''Foreign currency.''
==See also==
* [[An introduction to loan finance]]
* [[Association of Corporate Treasurers]] (ACT)
* [[Documentation]]
* [[Documentation risk]]
* [[Green Bond Principles]]
* [[Green Loan Principles]]
* [[IGA]]
* [[International Capital Market Association]]
* [[Loan Market Association]] (LMA)
* [[SONIA]]
* [[Sustainability-Linked Loan Principles]]  (SLLP)


A foreign currency trading ''at a premium'' in the forward foreign exchange market is stronger in the forward market, than in the spot market.


==Other resource==
* [https://www.treasurers.org/hub/technical/libor/borrowers_guide_to_loans_referencing_risk_free_rates?_cldee=ZG91Z0Bkb3Vnd2lsbGlhbXNvbi5jb20%3d&recipientid=contact-61e01a18fd04e61180d1000d3ab15408-2d69718a63d546aa841cde82413a3ca7&utm_source=ClickDimensions&utm_medium=email&utm_campaign=NEWS-MEM-2001&esid=a789fcaf-479c-eb11-8141-000d3ab15408 Borrower’s Guide to the LMA’s recommended forms of facility agreement for loans referencing risk-free rates (RFRs)]


5.  ''Product & service quality.''
[[Category:Accounting,_tax_and_regulation]]
 
[[Category:The_business_context]]
Higher-quality, in relation to a product or service.
[[Category:Corporate_finance]]
 
[[Category:Investment]]
The premium quality is normally reflected in higher pricing or other additional costs.
 
 
6.  ''Price reflecting benefits.''
 
An additional amount within a purchase price, reflecting additional benefits.
 
For example, a control premium in valuing a company.
 
 
7.  ''Price reflecting market conditions.''
 
An additional amount within a purchase price, reflecting market conditions such as an increase in demand.
 
 
:<span style="color:#4B0082">'''''Warehousing space at a premium'''''</span>
 
:"... if a logistics business saw reducing its warehousing capacity as a way to reduce costs in March 2020, it may have regretted that decision as internet volumes – which require large amounts of warehousing capacity – soared during the year, and as the world opens up, warehousing space is now at a premium.
 
:The message is: preserve cash to meet an objective, not just for the sake of it in itself."
 
:''Gary Slawther, interim group treasurer - The Treasurer, Issue 2, June 2021, p37''
 
 
8. ''Investment returns''.
 
Additional return required or expected by investors in certain assets.
 
For example, a term premium on longer maturity bonds.
 
 
== See also ==
* [[Bond]]
* [[Control premium]]
* [[Discount]]
* [[Excess]]
* [[Foreign currency]]
* [[Forward premium]]
* [[Greenium]]
* [[Insurance]]
* [[Market value]]
* [[Option]]
* [[Option holder]]
* [[Par value]]
* [[Premium Listing]]
* [[Redemption]]
* [[Return]]
* [[Term premium]]
 
[[Category:Long_term_funding]]
[[Category:Long_term_funding]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Financial_products_and_markets]]

Latest revision as of 23:57, 26 April 2023

Loan documentation - Loan Market Association (LMA).

Abbreviation for Risk Free Rate templates.


The RFR templates are recommended forms of loan facility agreement, referencing risk free rates.

They are published by the Loan Markets Association.


To assist treasurers approaching RFR-linked loans for the first time, Slaughter and May, in conjunction with the Association of Corporate Treasurers, have produced a Borrower’s Guide to the LMA’s RFR templates.

The Guide provides background to RFR lending terms from the borrower’s point of view, alongside a detailed commentary on the interest rate and related provisions of the RFR templates, highlighting aspects that borrowers might seek to adjust or negotiate.


See also


Other resource