Funding risk

Funding risk

The risk associated with the impact on a project's cash flow from higher funding costs or lack of availability of funds. See: interest rate risk.

Interest Rate Risk

The risk of loss due to a change in interest rates. Interest rate risk is important to transactions like interest rate swaps. In such a transaction, the party receiving the floating rate will receive a smaller amount should the floating rate decrease. Interest rate risk is also important to bonds; if interest rates rise, the prices of bonds fall. This affects the secondary market for bonds; for example, if one purchases a bond with a 3% interest rate and the prevailing rate rises to 5%, it becomes difficult or impossible to resell the bond at a profit. Finally, interest rate risk is important to project finance. If interest rates rise, funding may not be available for a new loan for a project that has already started.
Mentioned in ?
References in periodicals archive ?
As per the guidelines, the Reserve Bank may require an individual bank to adopt more stringent standards to reflect its funding risk profile and its compliance with the 'sound principles'.
The broader financial system is also substantially more resilient, with less leverage and funding risk than leading up to the financial crisis, so these sources of vulnerability are less likely to amplify the effects of falling asset prices." See the financial stability report.
ISLAMABAD -- At the United Nations, Pakistan has warned that arbitrary cuts in peacekeeping funding risk diminishing effectiveness of U.N.'s flagship operations and jeopardizing the safety of peacekeepers.
NEW YORK -- At the United Nations, Pakistan has warned that arbitrary cuts in peacekeeping funding risk diminishing effectiveness of U.N.'s flagship operations and jeopardizing the safety of peacekeepers.
Defined benefit pension plans are a significant financial commitment and risk, both now and in the future, so plan sponsors must take action to mitigate pension funding risk.
We associate default risk with the funding risk in our model of pension assets and liabilities, that is the risk that assets are not sufficient to meet liabilities in full as they fall due.
48 Factoring is a financial services company using proprietary software technology to assess funding risk and create innovative solutions to help small businesses grow.
In return, the project funding risk is split between the government and the road developer in the ratio of 40:60.
Analysts at Jefferies said, "We believe this project is at risk to cancellation due to a combination of regulatory risk and funding risk."
So, if my macro call is correct, I want to be only invested in countries with no dollar funding risk whose companies are positioned for growth in US exports.
CUTS in funding risk exposing cops to corruption, police chiefs warn.
Kareem Soos, head of the Individual Funding Risk Sector at NBE said that the bank agreed to grant funding for 50 low- and average-income cases from the total received.

Full browser ?