synthetic asset

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Synthetic Asset

A position in which one takes various positions to create the same effect as holding a certain asset or other investment vehicle. For example, one may borrow funds in one currency and lend the same amount in another currency in order to create the same effect as having a forward contract on one of the currencies.

synthetic asset

The combination of securities and/or assets in such a way that they produce the same financial effect as the ownership of an entirely different asset would. For example, selling a put option and buying a call option on a commodity produce the same financial effect as actually owning the underlying commodity.
References in periodicals archive ?
Barclays chose riskier synthetic assets so as to win its best against them, and chose safer cash assets to ensure that its bet would actually pay off," Space Coast wrote in its complaint, adding that the evidence "lay to rest any notions of chance and instead evince deliberate-indeed, malevolent-design.
Panelists will discuss topics including the limited scope of the current accounting and reporting rules; real examples of how CDS and TRS are used to create synthetic assets, liability and equity, as well as conversion of liability into equity; financial innovation; and the new Chapter 11.
The second, and perhaps even graver problem, is that the legacy companies' culture is biased towards preserving their synthetic assets.
A proxy for the expected return on liabilities can be developed by constructing a portfolio of synthetic assets with a similar risk profile to the liabilities.
The collateral manager may also use the available TRS facility to gain exposure to cash assets and synthetic assets structured as credit-linked notes and to effect conversions between cash and synthetic assets.
The collateral backing the notes is a portfolio of investment-grade debt securities (bonds, loans, and structured finance securities) and synthetic assets (total return swaps and credit default swaps) managed by AXA Investment Managers Paris S.
PWCE is equal to the sum of 10% of outstanding CP used to finance the purchase of receivable pools, and a dynamic calculation for eligible securities, corporate obligations, and synthetic assets, with a floor equal to the greater of 1% of outstanding CP and the lesser of $50.
When synthetic assets experience credit events or floating amount events, protection payments first come from the principal collection account, then from the reserve account, and finally the class A-1 notes are drawn upon to cover losses.
The CDO is also permitted to invest in commercial mortgage-backed securities (CMBS), CRE CDOs, real estate investment trust (REIT) debt, and synthetic assets.
The CDO is also permitted to invest in real estate investment trust (REIT) debt and synthetic assets.
The CDO is also permitted to invest in commercial mortgage backed securities (CMBS), CRE CDOs, REIT debt, and synthetic assets.
The CDO is also permitted to invest in commercial mortgage backed securities (CMBS), commercial real estate (CRE) CDOs, REIT debt, and synthetic assets.

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