AMF (Autorité des Marchés Financiers – Financial Markets Authority) : The Financial Markets Authority was born of the merger of the COB (Commission des Operations Boursières – stock exchange commission), the CMF (Conseil des Marchés Financiers – financial markets board) and the CDGF (Conseil de Discipline de la Gestion Financière – financial management compliance board). Created by the Financial Security Act of 1 August 2003, the purpose of this new entity is to make market regulation more efficient and transparent. The AMF’s four missions are to regulate, approve, supervise and discipline. It has jurisdiction over financial transactions and information, collective savings products, markets and industry participants. It may impose controls on or launch enquiries into the above.

Assimilation of an issue : It is possible to assimilate existing issues with a bond issue where they have the same characteristics (same residual maturity, same coupon, same repayment schedule, same repayment price, same guarantees). There remains a single loan, for a greater global amount.
The assimilation of loans has two advantages: reduced management costs and above all greater liquidity and therefore enhanced trading of these loans in the secondary market.

Available / cash funds : A company's available funds correspond to its most liquid assets, of which the cash balance and bank accounts form a part.

Bond issues : The placing on a market of a bond issue may be made in two ways:
public offering: this is an issue intended for a large number of investors. These may be institutional investors (banks, insurance companies, pension funds, etc.) or, if the issue is open to the general public, private individuals. A public offering is coordinated by a lead underwriter appointed by the issuer. The lead underwriter’s role is to place the bonds, in some cases by organising an underwriting syndicate made up of banks, who undertake to subscribe the security issue.
private offering: this is an issue reserved for a limited number of institutional investors.

Certificate of deposit : Certificates of deposit are negotiable debt securities issued by French-registered credit institutions. They have a minimum value of €150 thousand and a term on issue of between one day and one year. Issuers must publish the rating assigned to their issue programme by a specialised agency accredited by the Ministry of the Economy, while the issue programme must have prior approval from the Banque de France.

Comfort letter : A loan’s supporting documentation may include a comfort letter, through which a group acknowledges being informed of the existence of a bank loan granted to its subsidiary and pledges to support the subsidiary in the event the latter encounters financial difficulties. It is a moral commitment made independently of the lenders to make sure that the subsidiary repays the loans, and may even involve the parent company subscribing to a capital increase in its subsidiary to provide the necessary funds.

Commercial paper : this is the generic term for short-term debt securities that bear interest or offer a discount at issue, usually issued under a programme involving a maximum overall issue volume and periodic reissuance.

Commercial Agreement : This form of intervention, together with banking or financial partners, makes possible the rapid implementation of a range of financing products in new transactions; it can constitute a preliminary step in the creation of a Joint Venture or a subsidiary. RCI Bank is responsible for the marketing of the offer and the financing contracts within the automobile industry while the banking partner is responsible for the management.

Conversion risk : Assets of a maturity of more than one year are financed at least in part by short-term resources. The conversion risk therefore emphasises the liquidity risk linked to short-term financing of long-term investments.

Credit risk : Credit risk is the risk for a creditor of definitively losing his credit, to the extent that the debtor is not able, even after liquidating all his assets, to reimburse all his commitments. Traders talk of counterparty risk.

Credit worthiness : Creditworthiness conveys the ability of a company to live up to its commitments in the event of liquidation, that is, when it winds up its activity and puts its assets up for sale. A company may therefore be considered insolvent once its equity capital is negative, i.e. it owes more than it owns.

Debt based mutual fund : The debt based mutual fund is the container of the debts made by a credit institution preceding a securitization operation. In return shares are issued which can be placed with investors.

EONIA (Euro Overnight Index Average) : the daily reference rate for eurozone interbank cash deposits (i.e. without security collateral) of a one-day maturity. Weighted for volume, it is the average rate used between a broad sample of 57 major banks in actual transactions in the intraday, interbank euro money market on deposits and loans with a next-working-day maturity. Along with Euribor, which covers durations of between one week and one year, it is one of the eurozone money market’s two benchmark rates.

EURIBOR : Along with Eonia, this is one of the eurozone money market’s two main benchmark rates. It is an abbreviation of “Euro interbank offered rate” (Tibeur in French). For a given maturity (e.g. three months, often denoted as EUR3M), Euribor is the official rate calculated every day at 11 a.m. French time by the European Banking Federation (Fédération Bancaire Européenne - FBE) based on an average of the rates at which a sample of 57 major European banks lend cash (i.e. uncollateralised loans) to each other.

Euro Commercial Paper (ECP) : Euro commercial paper is commercial paper governed by UK law.

Euro Medium term notes : The EMTN is a debt security whose setting is very flexible: the issues are made under a single documentation (programme), the currency of the issue may be multiple, the maturity of the securities varies between 1 day and perpetuity, issue rates may be fixed or variable, the securities may be "plain vanilla" (ordinary) or structured. The EMTN programme is put in place through the intermediary of an "arranging bank" and the marketing of the securities is carried out largely by other banking partners, the "dealers"; the various payments relating to the issues are handled by the paying agents, all selected by the issuer.

Exchange rate risk : This is the risk that a fall in the exchange rate may lead to a fall in the value of foreign currency denominated credits. Similarly, a rise in rates may lead to a revaluation in domestic currency of foreign currency commitments.

Financial rating : The financial rating measures the quality of a borrower through the techniques of financial analysis and scoring. Agencies distinguish two types of rating: traditional rating which is applied to short-term borrowings (less than one year) or long-term issues and the short and long-term reference rating (in the absence of issue) which measures the counterparty risk that the borrower represents for an investor (rating attributed to a first-class debt).

Increase in capital : An increase in capital is, from a financial point of view, a sale of shares whose proceeds go to the company, and which will lead to the sharing of different elements in the company: rights to dividends, earnings, liquidating dividends, shareholders' capital and voting rights between the different capital providers. It can have different forms: either a cash or asset contribution, pursuant to a bond exercise or debt conversion, either reserved or not, with or without preferential subscription rights.

Interest rate risk : Interest rate fluctuations expose the holder of financial securities to the risk of capital losses. It is paradoxically a rate risk to the extent that it takes the form for the investor of a real or opportunity cost, notwithstanding the issuer’s strict respect of his commitments.

Joint Venture : A Joint Venture is a company which is usually jointly (50/50) owned by two shareholders having concluded a technological, industrial or commercial alliance to jointly develop their activities. It permits the sharing of the shareholders' means and the sharing of risks and capital investment. For its activities, RCI Bank favours this type of set-up on the emerging markets and associates itself with top quality banking partners who bring with them refinancing security, knowledge of the market concerned and management tools.

Lead underwriter : The financial intermediary in charge of the organisation of a transaction requiring several other financial institutions – in the case of a placing of securities on the market or the setting up of syndicated loans, for example.

Liquid funds : A company's liquid funds at a given moment are equal to the difference between its cash assets (financial and liquid investments) and its short-term banking and financial debt. It is therefore cash which it has in all circumstances (even if the bank decides to end its short-term lending), and almost immediately (taking only the time necessary to make available its short-term investments). Liquid funds are equal to the difference between the company's functional net current assets and its operating capital needs.

Liquidity risk : For a borrower, this is the risk of being unable to honour a scheduled loan repayment in the event the loan cannot be extended. For a lender or an investor, it is the risk of not being able to sell a financial security at its correct price. This can be reflected either in the impossibility of sale or in a discount, referred to as an illiquidity discount.

Market risk : This is the risk that an investor will incur a loss because of an unfavourable movement in the financial markets (e.g. interest rate hike, exchange rate fluctuation, rise in short-term borrowing costs).

Medium-term negotiable notes (Bons à moyen terme négociables - BMTN) : A category of French negotiable debt securities of an initial duration of more than one year, issuable on the money market subject to certain regulatory conditions (minimum amount of €150 thousand, financial information brochure approved by the Banque de France). Issuers must publish the rating assigned to their issue programme by a specialised agency accredited by the Ministry of the Economy, while the issue programme must have prior approval from the Banque de France.

Net borrowing : Net borrowing or a company's net financial indebtedness is the balance of its financial debts on the one hand and its liquid and financial investments on the other. It represents the company's net situation with third parties and outside the operating cycle. It is this balance that is used in calculating the leverage effect.

Off-balance sheet commitments : The principal off-balance sheet commitments may concern leasing operations, interest rate and foreign exchange management instruments and assets and liabilities guarantees when a company is sold.

Road show : This is a meeting or talk given by company directors during their marketing campaigns in which they directly solicit the markets (stock exchange introductions, capital increases), face to face with institutional investors.

Schuldschein : This is a short, medium or long-term borrowing, based on the recognition of a debt. The schuldschein is proof of the debt and the borrower's obligation to pay interest and capital (debt recognition).

Senior debt : Senior debt is debt of which the repayment takes priority over that of other types of debt, known as subordinated debt. It is therefore a privileged debt.

Shareholders' equity - function : The function of shareholders' equity is twofold. Their first function is to finance a part of investment. The most important purpose, however, is to serve as a guarantee to company creditors financing the other part of the investment. The price of shareholders' equity therefore includes a risk premium. Altogether, the importance of the amount of shareholders' equity testifies to the risk that the shareholders are prepared to take. In a crisis, the most indebted companies are the first to disappear.

Shareholders' equity : Shareholders' equity represents the money provided by the shareholders at the constitution of the company or at a later date, or left to the company's disposal as undistributed profits in the form of dividends. The companies bear the entire risk: if things go badly they will not be remunerated (no dividend will be paid); if bankruptcy is filed, the holders of shareholders' equity will be reimbursed only after all creditors have been paid back in full, which is very rarely the case. If on the other hand things go well, they will benefit from all the profits.

Subordinated debt : A debt is said to be subordinated when its repayment depends on the prior repayment of other creditors (privileged creditors, unsecured debt). Of course, in return for the supplementary risk that subordinated creditors accept, they will demand a higher interest rate than other creditors.

Swap : A financial derivative involving the exchange between two counterparties of the cash flows on a financial instrument. The two most common types of swap are:
- The plain vanilla interest rate swap, involving exchanging the interest on a notional variable-rate loan or deposit for fixed-rate interest payments;
- The currency swap, which involves a simultaneous foreign exchange spot transaction and forward transaction on the same currencies but in the opposite direction. It is essentially used to manage multi-currency cash positions. A currency swap can be considered as a borrowing in one currency and a loan in another.

US commercial paper (USCP) : commercial paper issued on the US market. Instruments of this type are denominated exclusively in US dollars and governed by SEC regulations.

Yield curve : The yield curve depicts the relationship between interest rates of different maturities. Generally, this curve is upward-sloping owing to the existence of a risk premium (longer rates higher than shorter rates). Nevertheless, it can be inverted, notably when the market anticipates a fall in intervention rates.