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Expert: Alice J. Bogert - 11/19/2006


Question
Hello
Could you explain to me, in layman's terms, two business terms such as "libor" and "negative pledge"
thank you  

Answer
Hi Luke, I'm not an expert in financial matters, but I will do my best to answer your question.  You might try researching the terms for more expanded examples or asking this question of someone in the banking or financial industry.

Libor is one of several indexes which are used when calculating an interest rate on adjustable mortgage loans. It is the popular choice when interest rates are lowered (which happened several times in 2005) because with the lowering of the interest rate, loan payments decrease, sometimes significantly.  Conversely, when interest rates rise (as they did throughout 2006), a Libor loan can be financially disastrous as monthly payments then increase as well.   

Think of a negative pledge as a promise not to do something. Negative pledges often appear in security documents to protect investment interests.   Usually it is part of an exchange agreement between the lender and the borrower.  For example, in exchange for a lower interest rate, the borrower agrees not to pledge any  other security interests on the same property used to obtain the loan. In that way, the lender is protected from another creditor altering the lender's status as first secured creditor.

I hope this was helpful.

Alice J. Bogert

Business & Technical Writing

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Alice J. Bogert

Expertise

I have taught English grammar to elementary school, high school, and college students for several years in addition to private tutoring for students struggling with writing assignments. I also teach adult writing classes for business professionals in the private sector as well as for various government agencies. I have edited manuscripts and other writings submitted by various authors for publication to magazines and journals

Experience

I have studied English grammar for many years. While employed as a federal probation officer, I wrote hundreds of pre-sentence reports to assist federal judges in making fair and appropriate sentencing decisions. I've written short stories and poetry for publication, and I've helped write policy and procedure manuals for various government offices.

Organizations
National Association of Retired Federal Employees Writers Guild of America Professional Women's Assoc.

Publications
"Journal of Juvenile and Family Courts," 1978. "International Library of Poetry," 2003.

Education/Credentials
I have an M.A, Degree in Sociology, and I minored in English.

Awards and Honors
I received three meritorious quality step awards for excellence during my career as a federal probation officer. I was also a nominee for National Probation Officer of the Year in 1986. I am listed in the 1998 edition of "Who's Who in Professions."

Past/Present Clients
California County and State government Federal government Various School Districts Los Rio Community College District Readers' Digest

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