Jargon beginning with: p

Packing Credits: A type of pre-finance/pre-shipment finance of which a Red Clause L/C is a variety.

Paris Club: Often used in the context of debt rescheduling arrangements to refer to the officially supported Export Credit Agencies which have guaranteed export credit loans made to a debtor country.

Partial Drawings: Under a Letter of Credit , when the amount drawn is less than that available under the credit.

Partial Shipment: When the quantity of goods shipped is only part of the total consignment in question.

Payment Under Reserve: A conditional payment which will need to be repaid if the conditions under which it was made are not met. In trade finance transactions often concerns payments between banks conditional upon receipt of certain documents.

PEP: Personal Equity Plan.A tax efficient investment product enabling private investors to invest in equities and bonds. Peps ceased to be available in April 1999.

Performance Bond: Issued by banks or insurance companies of behalf of suppliers or contractors providing surety to the recipient that contractual terms will be performed. The recipient can call the guarantee if they are not.

PFI: Project Finance Initiative. A UK scheme to involve the private sector in the construction, operation and financing of infrastructure and other public services which have traditionally been carried out by the public sector.

PIA: Personal Investment Authority now part of the FSA.

PIK loan: "Payment in Kind" loans can take a variety forms and structures. Commonly are medium term say 3 to 5 years, do not pay interest or repay during their term but all interest is capitalised and repayable in one tranche at the end. They may have a variety other features including fees and warrants attached to them but in essence are relatively high risk and high return for the lender.

Political Risk: See 'Country Risk'.

PPP: Purchasing Power Parity - a measure of wealth calculated by reference to the purchasing power of a currency in relation to the US Dollar.

PRA: Prudential Regulatory Authority - one of two regulatory bodies to be formed from the division of the UK Financial Services Authority and operating within the Bank of England. The other is the CPMA.

Praecipium: A type of front-end fee payable to the lead bank in a loan or bond transaction.

Pre-Advise: To notify the Beneficiary of a Document of Credit that the credit will be formally Advised to him within a short space of time.

Pre-Finance / Pre-Shipment Finance: A method of advancing funds to an exporter prior to shipment of goods. Similar in fact to a working capital loan.

Primary (Market): New issues of capital markets securities such as bonds or forfaited paper. As distinct from "secondary" paper which is already being traded in the market.

Prime Bank Guarantee: In principle this means a guarantee issued by first class bank. In practice it has come to be associated with spurious and fraudulent instruments purporting to be guarantees issued by highly creditworthy institutions designed to encourage inexperienced investors to part with their money.

Prime Rate: The rate of interest charged by US commercial banks to those borrowers with the strongest credit rating.

PRIPS: Packaged Retail Investment Products - The European Commission proposes to legislate for improved information to be made available to consumers of packaged investment products. This requires those producing and selling such investment products to prepare a Key Information Document (KID)

Project Finance: Used variously by financial institutions to mean: Finance made available to be repaid by revenue derived from a project. Corporate lending.

Promissory Note: A payment instrument evidencing an obligation to pay a sum of money on a fixed or determinable future date. It is issued by the person owing the money to, or to the order of, the person to whom the money is owed.

Protest: A formal legal procedure required in some countries to assert the right of a drawer of a bill of exchange to be paid.