Commercial borrowers

The second most important source of short-term financing is notes payable from commercial banks. Banks normally reqmre a Borrower to maintain a compensating balance. For example, if a company requires a loan of 100,000, it must borrow more than this, say, 120,000 (on which it pays interest), in order to maintain a minimum checldng-accouut balance of 20,000. Commercial banks also provide a wide variety of other services that can be of great help to companies in temporary financial difficulties. 

We prepared our science advisors with training on how to interact effectively with teachers and students, and we developed an Education Resource Center where they could borrow both activity plans and equipment to help their teachers do interesting hands-on science activities in their classes. This resource center was stocked both with commercial educational materials, as well as selected surplus equipment. Computers turned out to be particularly popular items—we now loan out on an annual basis about 200 computers that are outmoded for our technical purposes, but that the schools are delighted to have. At the request of teachers, our science advisors have ended up doing many of the same things as the School Partnership participants. About 50% of them do at least some activities directly with students. Others provide help in understanding science content, coordinate access to the resource center, assist with science fairs, and provide support for teachers in a variety of other ways. 

Ambassador Hemmen put on a show of holiness. References to the two heads of state were entirely out of place. "You leave me speechless," he said. "I beg you not to introduce political events of this kind to bolster unjustifiable commercial maneuvers." Perhaps, the Ambassador added, if the French gentlemen were not amenable to friendly meetings, the whole problem might be left to the military. "To borrow a word from a French statesman, I want co-operation. "... 

The normal external sources are loans from banks and other lending institutions at commercial rates of interest, and grants from governments or loans (also from overseas credit agencies) at lower than commercial rates of interest. The cost of a single source of borrowed money is easily determined - it is the annual rate of interest being charged on the loan. Where several different sources are used, a composite cost can be calculated (see below). 

A bond is simply a long-term promissory note. It is a contract established between borrower and lender in a document called an indenture. A bond indenture includes a detailed description of assets that are pledged, together with any protective clauses and provisions for redemption. A trustee is appointed to look after the interest of the bondholders. The trustee is normally a commercial bank. Bonds may be issued with a call provision that enables a company to redeem its bonds at any date earlier than scheduled. Obviously, this would be an advantage to a company in times of falling interest rates. However, a company has to pay more than the par value of the bond for this privilege. The additional amount is called the bond premium. 

The brute force approach to achieve this goal is to employ a solid-state photovoltaic cell to generate electricity that is subsequently passed into a commercial-type water electrolyzer. Although efficiencies obtained are relatively high, i.e., close to 8 %, these devices are very expensive. Hence the price of hydrogen produced this way cannot compete with conventional sources. The long-term outlook is better for systems that borrow their principles from natural photosynthesis (see Section 1.4.1 above). 

Organic polymers that possess the electronic, magnetic, and optical properties of metals are known as conductive polymers (CPs). Because of their conjugated u electron backbones, they can be oxidized or reduced more easily and more reversibly than conventional polymers with charge-transfer agents, also commonly called dopants, a term borrowed from condensed matter physics. While retaining some of the mechanical properties of polymers, they do not melt or dissolve in common organic solvents, a major impediment to their widespread commercialization in the same manner as traditional plastics. The same electronic structure that confers electrical conductivity to these polymers also contributes to their intractability and instability. 

For a discussion of the relative costs involved in the different markets, see Steven Pearlstein Jerry Knight, Banks Lose Out Ts Depositors Go Elsewhere Many Options Available for Saving, Borrowing, Investing, Wash. Post, Aug. 22, 1993, at Al Mitchell A. Post, The Evolution of The U.S. Commercial Paper Market Since 1980, 78 Fed. Res. Bull. 879 (1992). Capital market rates are usually lower because the large number of investors, as well as the free transferability of the securities, act as inherent risk spreaders. 

The addition of small amounts of metal alkyls to the reactor can significantly enhance the activity of Phillips catalysts, and modify the polymers they produce as well. This behavior was discovered during the 1950s and has been used commercially ever since, at least for some polymer grades. When used in this way, metal alkyls are usually called "cocatalysts", with the term borrowed from Ziegler catalysis. But in contrast to Ziegler catalysts, Phillips catalysts do not require cocatalysts. They are, at most, used to enhance the activity, not develop it. 

Although Catalyst was not a commercial success (the company BioCAD folded in 1994, and the software was taken over by MSI), it stimulated much interest in fully automated pharmacophore discovery. Martin et al. [16] developed DISCO, borrowing code from ALADDIN to detect features and employing a clique detection algorithm mathematically similar to the MNMM method. DISCO also relies on separate, exhaustive conformational analysis, and, in general, produces many pharmacophores consistent with the SAR. 

The data, borrowed from Camus and CKry, were probably obtained with a rennet of alkaline reaction, or else a rennet contaminated by foreign proteoljrtic enzymes, which can, in certain cases, influence its action perceptibly. With commercial rennet, as with rennet obtained from dried calf stomach linings, such a pronounced degree of sensitiveness toward dilution was not observed. 

Despite our focus on the public debt markets, banks still provide the bulk of corporate Europe s credit needs. Bank loans to commercial and industrial borrowers in Europe total 3,000 billion, compared to 651 billion of public fixed-rate investment grade debt. 

There is a wide variety of European securitisation transactions that are backed by one form or another of commercial property. This variety stems from the range of types of commercial property that may be included in the collateral pool, the type of borrower or borrowers, and the level of exposure to any underlying industries or sectors. As a result, it is not always clear where this sector begins or ends, and although it may be tempting to invent new subclassifications for the various fragments of the sector, this is not necessarily particularly helpful for investors or the market in general. To complicate matters further, a number... 

Large multiborrower deals, where numerous commercial property loans, originated to numerous borrowers and secured on a variety of properties are grouped together into one transaction, in a similar way to a traditional residential mortgage deal. Such a deal may be either a traditional true sale transaction or a synthetic credit-linked structure. 

Hall, who was 21 years old when he began his research, utilized handmade and borrowed equipment in his studies and used a woodshed near his Ohio home as his laboratory. In about a year s time he developed an electrolytic procedure using an ionic compound that melts to form a conducting medium that dissolves AI2O3 but does not interfere with the electrolysis reactions. The ionic compound he selected was the relatively rare mineral cryolite (Na3AlFg). H roult, who was the same age as Hall, independently made the same discovery in France at about the same time. Because of the research of these two unknown young scientists, large-scale production of aluminum became commercially feasible, and aluminum became a common and familiar metaL Indeed, the fectory that Hall subsequently built to produce aluminum evolved into Alcoa Corporation. 

Caps and floors are options on interest rates such as LIBOR, euribor, U.S. prime, and the commercial paper rate. A cap is a call option on interest rates, written by a market-making bank and sold to the borrower of a cash loan. In return for the premium, the bank agrees that if the reference rate rises above the cap level, it will pay the buyer the difference between the two. The cap thus places an upper limit on the rate the borrower must pay. The loan may precede the cap transaction and be with a third party. Alternatively, the cap may be transacted alongside the loan, or as part of it, as a form of interest rate risk management. In that case, the cap s notional amount will equal the loan amount. The cap term can be fairly long to match the loan term—commonly as much as ten years. 

Some lending institutions penalize borrowers who retire their loans early. In the United States, prepayment penalties are levied only for commercial mortgages, not for residential ones (both are penalized in the United Kingdom). Residential lenders, therefore, cannot be certain of the cash flows they will receive. This is known as prepayment risk. The uncertainty of mortgages cash flows, and the risk associated with it, is passed on to the securities backed by the loans. In this way, an MBS is similar to a callable bond, with the call exercisable at the discretion of the borrowers, and, as will be explained later, it can be valued using a similar pricing model. 

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