DEFINITION of 'Cash for Bond Lending'

A lending structure used in the Federal Reserve's Term Auction Facility (TAF), whereby borrowers receive a cash loan, by using all or a portion of their own portfolio of bonds as collateral.

BREAKING DOWN 'Cash for Bond Lending'

The cash for bond lending structure is not to be confused with the bond for bond lending structure, in which the borrower takes bonds instead of cash.

RELATED TERMS
  1. Lending Facility

    A mechanism that central banks use when lending funds to primary ...
  2. Term Auction Facility - TAF

    A monetary policy program used by the Federal Reserve to help ...
  3. Committed Facility

    A credit facility whereby terms and conditions are clearly defined ...
  4. Assignment Of Accounts Receivable

    A lending agreement, often long term, between a borrowing company ...
  5. Bond

    A bond is a fixed income investment in which an investor loans ...
  6. Negative Bond Yield

    A negative bond yield is an unusual situation in which issuers ...
Related Articles
  1. Small Business

    Bailout Acronyms 101

    The subprime meltdown gave rise to a mouthful of financial acronyms. Learn how to sort through this alphabet soup.
  2. Investing

    The Basics Of Bonds

    Bonds play an important part in your portfolio as you age; learning about them makes good financial sense.
  3. Investing

    Investing in Bonds: 5 Mistakes to Avoid in Today's Market

    Investors need to understand the five mistakes involving interest rate risk, credit risk, complex bonds, markups and inflation to avoid in the bond market.
  4. Investing

    Eyeing a Loan? Consider Skipping the Banks

    Peer-to-peer lending platforms, such as Lending Tree, Lending Club and Prosper, offer borrowers newfound leverage. Here's a look.
  5. Investing

    Why Companies Issue Bonds

    When companies need to raise money, issuing bonds is one way to do it. A bond functions like a loan between an investor and a corporation.
  6. Investing

    5 Fixed Income Plays After the Fed Rate Increase

    Learn about various ways that you can adjust a fixed income investment portfolio to mitigate the potential negative effect of rising interest rates.
  7. Investing

    Find The Right Bond At The Right Time

    Find out which bonds you should be investing in and when you should be buying them.
  8. Investing

    The 4 Biggest Bond Myths

    Bonds can be a great addition to a portfolio but be aware of these four myths.
Hot Definitions
  1. Time In Force

    Time in force is a special instruction used when placing a trade to indicate how long an order will remain active before ...
  2. Retirement Planning

    Retirement planning is the process of determining retirement income goals and the actions and decisions necessary to achieve ...
  3. Drawdown

    The peak-to-trough decline during a specific record period of an investment, fund or commodity. A drawdown is usually quoted ...
  4. Inverse Transaction

    A transaction that can cancel out a forward contract that has the same value date.
  5. Redemption

    The return of an investor's principal in a fixed income security, such as a preferred stock or bond; or the sale of units ...
  6. Solvency

    The ability of a company to meet its long-term financial obligations. Solvency is essential to staying in business, but a ...
Trading Center