overcollateralized
Too much backing
Overcollateralized describes a loan or financial instrument backed by collateral worth more than the amount borrowed.
A lender might require $150,000 in assets to secure a $100,000 loan, providing a cushion against default or declining asset values.
The practice is standard in mortgage-backed securities and crypto lending: The bond is overcollateralized at 120%.
Bundling debts into investable instruments
- tranchePortion of grouped securities
- subordinationLower position in hierarchy
- asset-backedSecured by underlying property
- mortgage-backedBacked by home loans
CDO · waterfall · senior · mezzanine · junior · credit enhancement · trigger · cash flow
Borrowed money repaid later
- borrowingTemporary taking of another's
- lendingTemporary provision of resources
- underwritingRisk evaluation and acceptance
- creditworthinessAbility to repay debts
repayment · principal · interest · maturity · lien · guarantor · debtor · creditor
Binding promise given
- assetItem of value owned
- equityImpartial treatment or ownership value
- propertySomething owned or inherent
- securityProtection from threat
backing · lien · encumbrance · margin · haircut · valuation · appraisal · mark-to-market
Preset standard option
- protectionGuarding against harm
- bufferProtective intermediate space
- cushionStuffed fabric for comfort
- safeguardPrecaution against harm
surplus · excess · coverage · hedging · mitigation · insolvency · bankruptcy · foreclosure
securitization
Bundling debts into investable instruments
- tranchePortion of grouped securities
- subordinationLower position in hierarchy
- asset-backedSecured by underlying property
mortgage-backed · CDO · waterfall · senior · mezzanine · junior · credit enhancement · trigger · cash flow · bondholders
loan
Borrowed money repaid later
- borrowingTemporary taking of another's
- lendingTemporary provision of resources
- underwritingRisk evaluation and acceptance
creditworthiness · repayment · principal · interest · maturity · lien · guarantor · debtor · creditor · mortgage
pledge
Binding promise given
- assetItem of value owned
- equityImpartial treatment or ownership value
- propertySomething owned or inherent
security · backing · lien · encumbrance · margin · haircut · valuation · appraisal · mark-to-market · perfected
default
Preset standard option
- protectionGuarding against harm
- bufferProtective intermediate space
- cushionStuffed fabric for comfort
safeguard · surplus · excess · coverage · hedging · mitigation · insolvency · bankruptcy · foreclosure · recovery
overcollateralizeduncollateralized
Without pledged security
unsecured · underfunded · naked · unhedged · exposed
overcollateralizedunsecured
Not backed by collateral
risky · vulnerable · unprotected · exposed · precarious
over, collateralized, collateralize, collateral, collaterals, collateralization, lateral, laterally, bilateral