Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 4 terms
What a lender pays for the money it lends — finance cost for the period divided by average borrowings.
The buying price. The selling price is visible to everybody and gets all the attention, and in most years it is the buying price that actually moved.
The rate paid on borrowings raised during the period, as distinct from the average rate carried by the whole existing stock of borrowings.
The average is history and this is the forecast. When it sits above the average, the average will climb on its own as old paper matures and is replaced — without the company borrowing one extra rupee.
Yield on assets minus cost of funds — two rates, subtracted.
The measure a capital raise cannot flatter. Net interest margin rises when more of the book is funded by shareholders’ money; the spread, being a difference of two rates, cannot move for that reason.
How a lender’s borrowings are split across bank term loans, debentures, commercial paper, foreign currency borrowing and subordinated debt — disclosed instrument by instrument in the borrowings note.
Cheap and short is cheap because the lender is exposed for weeks; dear and long is dear because it is exposed for years. The mix decides how fast the cost of funds moves when the market changes its mind.