What is a Syndicate Bid? A syndicate bid is a bid offered by a member of a banking syndicate to stabilize the price of a stock before its secondary offering on the NASDAQ exchange. Syndicate bids help manage the entry of new shares into the market without leading to a dangerous drop in the price
What Is a Syndicated Loan? A syndicated loan, also known as a syndicated bank facility, is financing offered by a group of lenders—referred to as a syndicate—who work together to provide funds for a single borrower. The borrower can be a corporation, a large project, or a sovereign government. The loan can involve a fixed
What Is Synergy? Synergy is the concept that the combined value and performance of two companies will be greater than the sum of the separate individual parts. Synergy is a term that is most commonly used in the context of mergers and acquisitions (M&A). Synergy, or the potential financial benefit achieved through the combining of
What is a Synthetic Call? A synthetic call is an options strategy that uses stock shares and put option to simulate the performance of a call option. This gives the investor a theoretically unlimited growth potential with a specific limit to the amount risked. Key Takeaways A synthetic call is an option strategy to create
What Is a Synthetic CDO? A synthetic CDO is a financial product that invests in non-cash assets such as swaps, options, and insurance contracts to obtain exposure to a portfolio of fixed-income assets. It is one kind of collateralized debt obligation (CDO). A CDO is a financial product structured by banks that pool and package
What Is a Synthetic Dividend? A synthetic dividend is an investment strategy in which investors use various financial instruments to create a stream of income mimicking that provided by dividend-paying companies. A common example of this strategy consists of selling covered call options against a portfolio of non-dividend-paying companies. In doing so, the investor would
What Is a Synthetic Lease? A synthetic lease is an off-the-balance sheet operating lease whereby a special purpose entity, established by the operating or parent company, purchases an asset and then leases it back to the operating company. The synthetic lease is popular among publicly traded companies that seek to improve debt to equity ratios
What Is a Synthetic Letter of Credit? A synthetic letter of credit (SLC) is a pre-funded, negotiable instrument that guarantees a specified payment will be rendered. Letters of credit can be structured in a variety of ways. Broadly, the different types of letters of credit can be grouped into two categories: funded and unfunded. Key
What Is a Systematic Manager? A systematic manager adjusts a portfolio’s long- and short-term positions on a particular security according to price trends. Systematic managers allow a security to remain part of the portfolio as long as the price of that security remains above a predetermined level. Key Takeaways A systematic manager is a type
What Is Systematic Risk? Systematic risk refers to the risk inherent to the entire market or market segment. Systematic risk, also known as “undiversifiable risk,” “volatility” or “market risk,” affects the overall market, not just a particular stock or industry. Key Takeaways Systematic risk is inherent to the market as a whole, reflecting the impact
