Tomáš Michlík DiS.

TM-System - Tomáš Michlík DiS.

Tenor Facility Agreement

Currently, Emma`s portfolio includes several highly worthy counterparty instruments with a five-year term. As they were purchased three years ago, these securities have a term of two years. Their portfolio also includes counterparty instruments with lower credit ratings. For these instruments, it limits its maximum duration to three years in order to manage its counterparty risk. To this end, Emma buys and sells short- and medium-term financial instruments with a term of between one and five years. This is done both in the corporate bond market and through derivative transactions with different counterparties. The term „tenor“ is also used for non-standard financial instruments such as derivative contracts. In this context, it is often used to describe the risk-taking of a given security. For example, a long-term futures contract could be described as relatively risky, given that there is still a significant period of time during which its value could fall. Derivatives with shorter maturities would also be considered less risky. To offset this perceived risk, buyers of high-term securities typically need compensation in the form of lower prices or higher risk premiums. Balloon credit: A balloon credit is similar to a depreciated credit, except that a large payment is made at the end of the loan term.

The amount of the hot air balloon payment affects the amount of the same payments that include both principal and interest. The term of the loan is usually between 5 and 25 years, with a maximum of 30 years, depending on the nature of the project and its service capacity. It is customary to provide for an additional period of time for the repayment of capital at the beginning of the period, but each operation is evaluated on a case-by-case basis. DFC can adjust flexible payments and depreciation, although our most common repayment plans are quarterly or semi-annual. Loans must be repaid in less than a year. They are usually used to meet working capital needs and can have a duration of one month to one year. Depending on risk-taking and financial objectives, some investors may even systematically avoid securities with a duration longer than the indicated period. For example, an entity that wishes to meet its short- and medium-term liquidity needs could buy and sell debt securities for five years or less. In this context, adjustments could be made on the basis of the perceived solvency of the counterparties concerned. For example, an entity could accept a five-year maturity for high-credit counterparties, while poorly rated counterparties are limited to maturities of three years or less. Risk, repayment and maturity alone do not describe all credit structures. .

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