Funded Debt

Funded Debt

A company's debt, such as bonds, long-term notes payables or debentures that will mature in more than one year or one business cycle. This type of debt is classified as funded debt because it is funded by interest payments made by the borrowing firm over the term of the loan. Funded debt is one form of financing a company can use to finance its long-term capital projects, such as the addition of a new product line or the expansion of operations. The firm may also use short-term financing to fund its long-term operations. This exposes the firm to a higher degree of interest rate and refinancing risk, but allows for more flexibility in its financing.

Auction Market Preferred Stock (AMPS)

Auction Market Preferred Stock (AMPS)

A type of preferred stock which has its dividend rate reset by Dutch auction. The interest rate on the stock generally has a ceiling, and the dividend rate is often reset every forty-nine days. It is a type of floating-rate investment. The auction market preferred stock can be a beneficial investment for larger investors. The auction process will most likely reveal the current market yield for less-risky asset classes, such as preferred stock, and will self-adjust for the effects of alternative investments and inflation.

Unissued Stock

Unissued Stock

Stock that a publicly-traded company's charter permits the company to issue, but which the board of directors has not elected to issue. A company may keep unissued stock from public trade to reduce its earnings per share, which can increase the share price. Having unissued stock also gives the company flexibility to issue more shares if it so chooses.

Restricted Stock

Restricted stock

A stock of a company that is not fully transferable until certain conditions have been met. Upon satisfaction of those conditions, the stock becomes transferable by the person holding the award. Restricted stock (also known as letter stock or restricted securities) must be traded in compliance with special SEC regulations.

Stock Jobbing

Stock Jobbing

The buying and selling of securities with the intent of generating quick profits. While most investors seek value through long-term investments, stock jobbing takes on a more speculative short-term tone.

Stub Stock

Stub

Stock in a company that is over-leveraged as a result of recapitalization. Stub stock is very speculative and risky. Stub stock's advantage over junk bonds is that it has unlimited potential if the company turns things around.

Leveraged Recapitalization

Leveraged Recapitalization

A strategy where a company takes on significant additional debt with the purpose of either paying a large dividend or repurchasing shares. The result is a far more financially leveraged company. This is often used in risk arbitrage. It is also a form of shark repellent.