Overcollateralization

0.02 sec.

The practice or process of placing an asset as collateral on a loan where the value of the asset exceeds the value of the loan. For example, a person could pledge a farm (worth $10 million) on a loan for $5 million. Usually, however, the value of the asset only exceeds the value of the loan by 10-20%. Overcollateralization reduces the risk for the lender and improves the borrower's creditworthiness. It is used most commonly when a bond issuer wishes to improve its credit rating.

Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content.

?Page tools

Printer friendly
Cite / link

Feedback
Add definition

Mentioned in	?		References in periodicals archive	?		Financial browser	?		Full browser	?
No references found			Due to the high default rate, all of the overcollateralization tests (classes A/B, C, and D) are currently in violation. S&P Lowers Ratings on Summit CBO I Ltd. Class A, B Notes; Off Watch by PR Newswire Fitch expected ratings on the notes and certificates are based upon their respective levels of subordination, the specified credit enhancement amount, which consists of funds in the reserve account, overcollateralization, and the yield supplement overcollateralization amount (YSOA). Fitch Ratings Expects to Rate Hyundai Auto Receivables Trust 2004-A by Business Wire According to the March 29, 2002 trustee report, the class A/B overcollateralization test (currently 110. S&P Puts Ratings on Class A, B of Triton CDO IV on CreditWatch ... by PR Newswire			Over the Counter over-and above money Over-Hedging Over-the-Counter Over-the-Counter Bulletin Board Over-the-Counter Market Over-the-Counter Option Over-the-Counter Stock Overadvance overage overall capitalization rate Overall FTC limitation Overall Market Price Coverage overall rate of return Overallotment Overallotment Option Overapplied Overhead Overbase Compensation Overbooked Overborrowed Overbought Overbought-Oversold Indicator overbuilding Overcapitalization Overcharge Overcollateralization Overdepreciation Overdraft Overdraft Cap Overdraft Checking Account Overdraft Facility Overdraft Protection Overdue Overexposure Overfull Employment Overfunded Pension Plan Overfunding Overgrowth Overhang Overhanging Bond Overhanging Supply Overhead Overhead Resistance Level Overheating overimprovement Overinvestment Overissue Overlap the Market Overlapping Debt Overlay Strategy Overmargined			Overclockers Club Overclockers Comparison Page Overclockers United Kingdom Overclocking Overclocking Overclocking overclocks overclosure overclothe overclothes overcloud overcloud overclouded overclouded overclouding overclouding overclouds overclouds Overcloy overcoat overcoat overcoat overcoat overcoat overcoating overcoating Overcoats Overcoats overcoding Overcold Overcollateralization Overcollateralize Overcollateralized Overcollateralizes Overcollateralizing Overcolor overcoloring overcome overcome overcome another’s resistence Overcome By Events overcome by liquor overcomer overcomes overcomes overcoming overcoming Overcoming Homophobia Meeting for Youth Overcoming the Odds overcommit overcommit overcommitment overcommitment overcommitments overcommitments overcommits overcommits overcommitted overcommitted overcommitting overcommitting

Financial Dictionary

Free Tools:	For surfers: Free toolbar & extensions \| Word of the Day \| Help For webmasters: Free content \| Linking \| Lookup box \| Double-click lookup

Disclaimer
All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional.