What Is a Subprime Loan? A subprime loan is a type of loan offered at a rate above prime to individuals who do not qualify for prime-rate loans. Quite often subprime borrowers have been turned down by traditional lenders because of their low credit ratings or other factors that suggest they have a reasonable chance
What Was the Subprime Meltdown? The subprime meltdown was the sharp increase in high-risk mortgages that went into default beginning in 2007, contributing to the most severe recession in decades. The housing boom of the mid-2000s—combined with low-interest rates at the time—prompted many lenders to offer home loans to individuals with poor credit. When the
What Is Subrogation? Subrogation is a term describing a right held by most insurance carriers to legally pursue a third party that caused an insurance loss to the insured. This is done in order to recover the amount of the claim paid by the insurance carrier to the insured for the loss. Key Takeaways Subrogation is a term
What Is Subscribed? The term subscribed refers to newly issued securities that an investor agrees or intends to buy prior to the official issue date. When investors subscribe, they expect to own the number of shares they designate once the offering is complete. This is common with institutional investors who are guaranteed shares by subscribing to
What Is a Subscription Right? A subscription right is the right of existing shareholders in a company to retain an equal percentage ownership by subscribing to new stock issuances at or below market prices. The subscription right is usually enforced by the use of rights offerings, which allow shareholders to exchange rights for shares of common
What Is a Subsequent Offering? The term subsequent offering refers to the issuance of additional stock shares after a company has already gone public through an initial public offering (IPO). Subsequent offerings are, thus, made by companies that are already publicly traded or by an existing shareholder. These offerings are commonly made on a stock
What Is a Subsidiary? In the corporate world, a subsidiary is a company that belongs to another company, which is usually referred to as the parent company or the holding company. The parent holds a controlling interest in the subsidiary company, meaning it has or controls more than half of its stock. In cases where a
What Is a Subsidiary Bank? A subsidiary bank is a type of foreign entity that is located and incorporated in a foreign country but is either wholly-owned or owned in a major part by a parent corporation in a different nation. This particular banking model helps the parent company avoid unfavorable regulations enforced by the home country.
What Is a Subsidy? A subsidy is a benefit given to an individual, business, or institution, usually by the government. It can be direct (such as cash payments) or indirect (such as tax breaks). The subsidy is typically given to remove some type of burden, and it is often considered to be in the overall
What Is a Substandard Insurance? An individual who may not qualify for a standard insurance policy may receive a substandard insurance policy from an insurance provider. Substandard insurance policies contain special or restrictive provisions and will have higher premiums due to the higher risk posed by the individual. Since they are considered a higher risk, it increases the probability
