rollover risk

Definition

The danger that you won't be able to refinance maturing debt or will only be able to do so at punishing rates. The financial equivalent of your credit card's intro rate expiring at the worst possible moment.

Example Usage

The company's heavy rollover risk became apparent when $2 billion in bonds matured during a credit crunch and refinancing costs tripled.

Origin

Banking and credit market terminology describing the risk of 'rolling over' maturing obligations.

Fun Fact

Rollover risk is why CFOs lose sleep over debt maturity schedules—having all your debt mature at once is a recipe for disaster.

Source: Corporate treasury and credit analysis

Related Terms

Intermediate

intangible

Assets you can't drop on your foot but can definitely put on a balance sheet—think patents, trademarks, goodwill, and brand value. These incorporeal treasures represent value that exists purely in the realm of ideas, agreements, and legal rights. Accountants love arguing about how to value them since you can't exactly take them to a pawn shop.

💰 Finance / Accounting

Advanced

futures

Financial contracts obligating parties to buy or sell assets at predetermined future dates and prices, essentially allowing traders to bet on tomorrow's commodity prices today. These derivatives let farmers hedge against price drops and speculators gamble on market movements without ever touching an actual bushel of wheat. The futures market adds liquidity and price discovery to markets while giving financial news anchors something to dramatically discuss at market close.

💰 Finance / Accounting

Intermediate

capitalization

Either the total value of a company's outstanding shares (market cap) or the act of writing things with capital letters—context matters. In finance, it's how much the market thinks your company is worth, which may bear no resemblance to reality. Also refers to recording costs as assets rather than expenses, because accountants love making things complicated.

💰 Finance / Accounting

Beginner

tax

Money the government extracts from your paycheck for the privilege of living in a civilized society with roads, schools, and bureaucrats. Beyond the transaction fees you pay for specific services, it's the general admission ticket to citizenship. Can also mean any burdensome demand, like when your boss taxes your patience with another Monday meeting.

💰 Finance / Accounting

Intermediate

internal controls

Processes and procedures designed to prevent fraud, errors, and general financial chaos within an organization. They're like locks on doors—ineffective if someone with a key decides to rob the place, but they keep honest people honest.

💰 Finance / Accounting

Intermediate

depletion

The exhaustion of a resource faster than it can naturally replenish itself, whether that's oil reserves, soil nutrients, or your marketing budget by mid-quarter. In accounting, it's the method for allocating the cost of extracting natural resources. Basically, fancy terminology for "we used it all up."

💰 Finance / Accounting

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