hypothecation

hypothecation
(1) An archaic term for pledging that did not involve either possession or title transfer.
(2) Any pledge of an asset as collateral for a debt. (An uncommon but correct usage.)
(3) The pledge of marketable securities or deposits to secure a loan - particularly the pledge of marketable securities or deposits owned by someone other than the borrower. American Banker Glossary
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In banking, refers to the commitment of property to secure a loan. Bloomberg Financial Dictionary
In securities, refers to the commitment of securities to serve as collateral for margin loans at the broker-dealer firm. Bloomberg Financial Dictionary

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   1) The pledging of assets to secure a loan.
   2) The dedication of the proceeds of a specific tax to a specific purpose.

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hypothecation UK US /haɪˌpɒθəˈkeɪʃən/ noun [U]
► TAX a situation in which money from a particular tax is only spent on one particular thing: »

Traditionally the UK Treasury has rejected the idea of hypothecation.

► FINANCE a situation in which an organization borrows money in relation to particular assets that become the property of the lender if the borrower cannot pay back the loan: »

Income Notes are secured by way of hypothecation of the assets covered by each Income Note.


Financial and business terms. 2012.

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Look at other dictionaries:

  • hypothecation — I noun collateral, contract of mortgage, contract of pledge, creation of a lien, guarantee, lien, mortgage, pledge, security associated concepts: hypothecated property II index charge (lien), cloud (incum …   Law dictionary

  • Hypothecation — Hy*poth e*ca tion, n. [LL. hypothecatio.] 1. (Civ. Law) The act or contract by which property is hypothecated; a right which a creditor has in or to the property of his debtor, in virtue of which he may cause it to be sold and the price… …   The Collaborative International Dictionary of English

  • Hypothecation — See also hypothec. The original use of the word hypothecation was for a pledge of property as collateral for a debt without transfer of possession to the party making the loan. The arrangement is common with modern mortgages the borrower retains… …   Wikipedia

  • hypothecation — A Roman law name for a pawn or pledge wherein the feigned pledge remained in the possession of the pledgor. 41 Am J1st Pldg & Col § 2. A contract whereby, without change of possession, specific property is designated as security for the payment… …   Ballentine's law dictionary

  • hypothecation — 1) An authority given to a banker, usually as a letter of hypothecation, to enable the bank to sell goods that have been pledged to them as security for a loan. It applies when the bank is unable to obtain the goods themselves. The goods have… …   Accounting dictionary

  • hypothecation — 1) An authority given to a banker, usually as a letter of hypothecation, to enable the bank to sell goods that have been pledged (see pledge) to them as security for a loan. It applies when the bank is unable to obtain the goods themselves. The… …   Big dictionary of business and management

  • hypothecation — hə̇ˌpäthəˈkāshən, (ˌ)hīˌ noun ( s) Etymology: Medieval Latin hypothecation , hypothecatio, from hypothecatus (past participle) + Latin ion , io ion 1. Roman, civil, & maritime law : the act or contract by which property (as real property) is… …   Useful english dictionary

  • hypothecation certificate — noun : a certificate attached to a bill of exchange empowering the holder to dispose of merchandise if payment or acceptance is refused called also letter of hypothecation …   Useful english dictionary

  • hypothecation — noun see hypothecate I …   New Collegiate Dictionary

  • hypothecation — See hypothecate. * * * …   Universalium

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