Glossary

Debt Obligations: an obligation to make a repayment of money to another person, including accounts payable and the obligations arising under promissory notes, bills of exchange and bonds

Principal Values: the original sum of money borrowed in a loan, or put into an investment.

Senior Tranche: senior tranches typically contain assets with higher credit ratings and lower yields than junior tranches. The senior tranches have first lien on the assets—they're in line to be repaid first, in case of default.

Junior Tranche: Junior tranches have a second lien or no lien at all with higher yields.

Coverage Ratio: Coverage ratio is the portion of Junior Tranche (first loss) in a loan facility. A lending pool with 20% coverage ratio means Junior Tranche accounts for and assumes 20% first loss coverage in case of default.

Exchange Traded Fund (“ETF”): A pool of securities that trades on an exchange just like a stock does.

Receivables: The balance of money due to a firm for goods or services delivered or used but not yet paid for by customers.

Supply Chain Financing: A financing solution in which suppliers can receive early payment on their invoices.

Corporate Loans: A debt-based funding arrangement between a business and a financial institution such as a bank.

Tangible Asset: a tangible asset is an asset that has a finite monetary value and usually a physical form. Tangible assets are the opposite of intangible assets which have a theorized value rather than a transactional exchange value.

Cash drag: A portion of a portfolio in cash rather than investing this portion in the market.

(DeFi) Liquidity: Liquidity in crypto refers to the ease with which tokens can be swapped to other tokens or fiat currencies. In NAOS lending pools, liquidity is used interchangeably as capital.

Grace Period: a grace period is a set length of time after the due date during which payment may be made without penalty.

Asset-based Lending: asset-based lending is a loan or line of credit issued to a business that is secured by some form of collateral. The various types of collateral used in asset-based lending includes but are not limited to inventory, equipment, accounts receivable and other balance-sheet assets. On the other hand, for unsecured lending, it is usually called credit-based lending. Credit score is required to review for the credit limit.

Loan Facility: an arrangement where a person or organization can borrow money up to a particular amount if and when they need it.

Nominal interest: nominal interest rate is the interest rate before taking inflation into account, in contrast to real interest rates and effective interest rates.