merchant bank

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Merchant bank

A British term for a bank that specializes not in lending out its own funds, but in providing various financial services such as accepting bills arising out of trade, underwriting new issues, and providing advice on acquisitions, mergers, foreign exchange, portfolio management, etc.

merchant bank

An investment bank that commits its own funds by taking a creditor position or equity interest in another firm. For example, a merchant bank may provide temporary financing for a leveraged buyout.

merchant bank

a BANK which offers a range of financial facilities and services to clients. The merchant banks are still involved in what was their original business, namely the provision of merchandise finance, in the form of ‘acceptance’ notes on BILLS OF EXCHANGE to importers and exporters to cover products in transit. They have extended their interests variously into investment management, stockbroking, MARKET MAKING and corporate finance (see VENTURE CAPITAL). In the latter capacity, merchant banks arrange new stock and share issues on behalf of corporate clients (see SHARE ISSUES) and UNDERWRITE such issues. Merchant banks nowadays play a particularly prominent role in advising corporate clients on MERGERS and TAKEOVER BID tactics and in putting together the financial terms and details of such deals. See BANKING SYSTEM, INVESTMENT BANK.

merchant bank

a BANK that offers a range of financial facilities and services to clients. The merchant banks are still involved in what was their original business, namely the provision of merchandise finance in the form of ‘acceptance’ notes on BILLS OF EXCHANGE to importers and exporters to cover products in transit. They have variously extended their interests into investment management, stockbroking, market-making (see MARKET MAKER) and corporate finance (see VENTURE CAPITAL). In the latter capacity, merchant banks arrange new stock and SHARE ISSUES on behalf of corporate clients and UNDERWRITE such issues. Merchant banks nowadays play a particularly prominent role in advising corporate clients on MERGERS and TAKEOVER BID tactics and in putting together the financial terms and details of such deals. See BANKING SYSTEM.
References in periodicals archive ?
The funding structure Capital Corp Merchant Banking has devised consists of providing its client with USUSD3.
He eventually created his own Firm, Capital Corp Merchant Banking, where he syndicates and structures funding for top companies worldwide, all the while investing his own firm's funds into the projects.
To qualify for a specific merchant banking program, a typical client needs a gross margin of between 20 and 30 percent on its products and sales of at least $1 million a year.
The Board and the Treasury received a significant amount of useful information and comment that led us to revise in some important respects the rules that implement the merchant banking powers in the Gramm-Leach-Bliley Act.
Revising the restrictions that apply to merchant banking investments held beyond the permissible holding period
171--What are the limitations on managing or operating a portfolio company held as a merchant banking investment?
It would allow merchant banking to continue to develop along the lines already evident in the industry and in the manner intended by the Congress.