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Participation

• Occurs when an investor receives a portion of the profits, appreciation, or increased cash flow. This term tends to occur in the fixed income or real estate markets.

 
 Embedded terms in definition
 Appreciation
Cash flow
Cash
Income
Investor
Real estate
 
 Referenced Terms
 Adverse selection: A situation in which market Participation is a negative signal.

 Earned income: Income derived from active Participation in a trade or business. Includes wages, salary, tips, commissions and bonuses. See also: Unearned Income.

 Issuer: (1) The entity, such as a corporation or municipality, that offers or proposes to offer its securities for sale. (2) The creator of an option: the issuer of an over-the-counter option is the option writer, and the issuer of a listed option is the Options Clearing Corporation. There are two exceptions to the definition of issuer. In the case of voting-trust certificates or collateral-trust certificates, the issuer is the person who assumes the duties of depositor or manager. Also, there is considered to be no issuer for certificates of interest or Participation in oil, gas, or mining titles or leases where payments are made out of production.An entity that issues a financial asset.

 Leveraged buyout: Abbreviated LBO. An acquisition technique involving the use of a large amount of debt to purchase a firm; an example of a financial merger.Abbreviated LBO. A transaction used for taking a public corporation private financed through the use of debt funds: bank loans and bonds. Because of the large amount of debt relative to equity in the new corporation, the bonds are typically rated below investment grade, properly referred to as high-yield bonds or junk bonds. Investors can participate in an LBO through either the purchase of the debt (i.e., purchase of the bonds or Participation in the bank loan) or the purchase of equity through an LBO fund that specializes in such investments.

 Mortgage pass through securities: A securitized Participation in the interest and principal cash flows from a specified pool of mortgages. Principal and interest payments made on the mortgages are passed through to the holder of the security.

 
 Related Terms
 Participation certificates
Strip mortgage participation certificate strip pc

<< Participating preferred stock Participation certificates >>

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