credit enhancement


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Credit enhancement

The purchase of the financial guarantee of a large insurance company to raise funds. In the context of project financing, the issuance of a guarantee or additional collateral to reinforce the credit strength of a project financing. Also, the reduction of counterparty risk on a swap transaction through such measures as bilateral netting.

credit enhancement

An addition to a bond issue that improves the issue's safety of principal and interest. For example, the purchase of insurance guaranteeing payments on a bond issue is credit enhancement.

credit enhancement

A method of reducing the risk of extending credit to a borrower. It can include requiring collateral,a stand-by letter of credit,a comaker,a guarantor,or any other means.

References in periodicals archive ?
(1) Transaction capital structure, proposed ratings and form and sufficiency of available credit enhancement.
Mumbai (Maharashtra) [India] August 05 (ANI/NewsVoir): Ithuba Credit Corporation Ltd and High Ground Enterprises Ltd (HGEL), through its Singapore subsidiary gets into an advisory appointment arrangement for the specific purpose of jointly creating a 'Credit Enhancement Program'.
Liquidity and program-wide credit enhancement (PWCE) is provided by JPMorgan (AA/F1+).
(ii) 1MDB Energy Limited and Aabar Investments PJS Limited (Aabar Limited) had signed a 'Collaboration Agreement for Credit Enhancement', on May 21, 2012, whereby 1MBD Energy Limited had agreed to pay Aabar Limited an additional credit and collateral sponsorship in cash (collateral credit enhancement) as a reward to Aabar Limited in securing a guarantee from International Petroleum Investment Company PJSC.
BSP's credit enhancement scheme yields P5.3 billion in loans !-- -- Lawrence Agcaoili (The Philippine Star) - November 6, 2018 - 12:00am MANILA, Philippines Total loans to micro, small and medium enterprises (MSMEs) under a credit enhancement scheme amounted to P5.31 billion since the program was launched more than a decade ago, data from the Bangko Sentral ng Pilipinas (BSP) showed.
KARACHI -- The Pakistan Credit Enhancement Facility (PCEF) was introduced to public and private sector stakeholders today in a conference co-hosted by Karandaaz Pakistan and UK's Department for International Development (DFID) in Islamabad.
Islamabad -- The Pakistan Credit Enhancement Facility (PCEF) was introduced to public and private sector stakeholders today in a conference co-hosted by Karandaaz Pakistan and UK's Department for International Development (DFID) in Islamabad.
Lasitha Perera, CEO of GuarantCo, said 'It is expected that the Pakistan Credit Enhancement Facility (PCEF) will enhance Pakistan's capacity to attract and unlock latent pools of capital from pensions and insurance for infrastructure investment into key sectors of the country's economy.
Description The project is a guarantee facility for ADB to issue partial credit guarantees without government counter guarantee, in amounts, in aggregate, of up to Rs7,168,000,000 Indian Rupees in favor of eligible Indian financial institutions providing credit enhancement for infrastructure project bonds in India.
Global Banking News-October 3, 2016--SBI, Punjab National Bank to acquire stake in Credit Enhancement Fund
The Greater Gabbard offshore transmission link is the first UK based infrastructure project to attract finance from institutional investors using the project bond credit enhancement initiative (a joint programme of the European Investment Bank and European Commission in the framework of Europe 2020').
His prepared remarks state, "Fannie Mae and Freddie Mac should be required by FHFA to accept pools with deeper levels of credit enhancement, and provide bona fide offsetting reductions in guarantee fees."