Forward sale

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Forward sale

A method for hedging price risk that involves an agreement between a lender and an investor to sell particular kinds of loans at a specified price and future time.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Forward Sale

1. The sale of a future loan in which the lender (seller) guarantees an investor a certain payment flow and interest rate. This is usually done to hedge against the investor's future foreign exchange risk and interest rate risk.

2. In Islamic banking, the purchase of and payment for a specified good or service at a price usually lower than market value, with delivery deferred until a set future date. A bank buys a commodity before it is grown or manufactured, then may re-sell it to a third party in order to turn a profit on the transaction. This is used as a form of financing for farms and businesses, and is governed by a salam contract.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
"Our strategy to reduce forward sales risk through an increased proportion of pre-funded, presold homes has also realised a 15% increase in our total forward sales position.
But total residential forward sales including joint ventures rose 11% to PS500.5 m, while weekly sales per outlook has "proven resilient", remaining unchanged at 0.78 during the six months, according to Crest.
NORTHERN housebuilding giant Persimmon has revealed a drop in forward sales and became the latest group to warn over rising build costs.
Persimmon revealed a drop in forward sales and warned over rising build costs.
Housebuilding giant Persimmon revealed a drop in forward sales and became the latest group to warn over rising build costs.
Easterly Government Properties announced that it has commenced a public offering of an aggregate of 15,500,000 shares of its common stock, consisting of 8,500,000 shares offered directly by the Company and 7,000,000 shares offered on a forward basis in connection with the forward sales agreements.
Forward sales are up 13.8% and the company said it had "a substantial year end net cash balance."
Forward sales are up 13.8% and chief executive David Thomas said: "This has been another excellent year for the group.
Upon settlement of the forward sales agreements, the offering will result in approximately USD 81.7m of gross proceeds to the company, assuming the forward sales agreements are physically settled in full and without taking into account the underwriters' option to purchase additional shares.
Exporters in default will be held responsible for covering lost revenues caused by the resales and will be banned from forward sales auctions until they pay what they owe.

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