Prepayment premiums meaning

This glossary sets out many of the expressions commonly used in the leveraged finance market. Words appearing in the definitions in bold are defined elsewhere in this glossary. For further banking terminology, please refer to the main Banking & Finance Glossary... Acquisition finance glossary—A Acceleration Acceleration is the formal action taken by the agent, on the instructions of the majority lenders, following an event of default, such as making a demand for early repayment of the loan. See Practice Note: Accelerating a loan for more information... Accordion feature/accordion facility An accordion, also called an incremental debt feature, is a mechanism in the facilities agreement that, provided specified conditions are satisfied (for example, pro forma compliance with a leverage test), permits those lenders under the facilities agreement who wish to do so to advance additional debt. The terms for that extra debt are typically captured in an increase notice. This accordion or incremental debt flexibility is different from structural adjustment, which usually requires the majority consent...

IPT is an indirect levy on insurance premiums. Unless an exemption applies, IPT is imposed as a percentage of the premium paid on particular categories of insurance policies issued by particular categories of insurers that cover risks situated in the UK. The economic burden of IPT is usually carried by the policyholder, yet the tax itself is accounted for and paid to HMRC by the insurer by reference to three-month accounting periods. Strictly, the premium includes IPT. As a result, the legislation differentiates between the premium and the ‘chargeable amount’ (the amount before IPT is added). The premium equals the chargeable amount plus IPT. For further details on what ‘premium’ means for IPT purposes, see: Premium below. IPT is due at 12% of the chargeable amount, the standard rate, unless the premium falls within the higher rate of 20%. Legislation and guidance The main sources of legislation are: the Finance Act 1994 (FA 1994), and the Insurance Premium Tax Regulations 1994, SI 1994/1774 (IPT...

Banking & Finance glossary A Auditing and Accounting Organisation for Islamic Financial Institutions (AAOIFI) The foremost Islamic, international, autonomous, independent, not-for-profit corporate body that develops and issues accounting, auditing, governance, ethics and Shari’ah benchmarks and standards for Islamic Financial Institutions (IFIs) and the wider Islamic finance sector. Founded in Bahrain in 1991, it is backed by a number of institutional members across more than 45 countries, including central banks and regulatory authorities, financial institutions, accounting and auditing practices, and legal firms. Its pronouncements are currently applied by leading Islamic financial institutions across the world and have advanced a progressive and gradual harmonisation of global Islamic finance practice. It also delivers professional qualification programmes—notably Certified Islamic Professional Accountant (CIPA), Certified Shari’ah Adviser and Auditor (CSAA), and the corporate compliance programme—in efforts to strengthen the industry’s human capital and governance frameworks. For further details, see Practice Note: Key participants in the Islamic finance industry—Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). Acceleration Acceleration is the formal action...