WARRANT

warrant: translation

(1) An order drawn by a payor directing its treasurer to pay a specified amount to the person named or to the bearer. It may be payable upon demand, in which case it usually circulates in the same way as a bank check; or it may be payable only out of certain revenue when and if received, in which case it does not circulate as freely.

(2) A financial instrument that gives the holder the right, but not the obligation, to purchase a specified amount of an asset at a specified price during a specified period of time. A warrant may give its holder the right to buy shares of stock, bonds, currencies, or commodities. The major difference between warrants and options is that prices for warrants are usually published with lists of the prices for the underlying assets. American Banker Glossary

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A security entitling the holder to buy a proportionate amount of stock at some specified future date at a specified price, usually one higher than current market price. Warrants are traded as securities whose price reflects the value of the underlying stock. Corporations often bundle warrants with another class of security to enhance the marketability of the other class. Warrants are like call options, but with much longer time spans-sometimes years. And, warrants are offered by corporations, while exchange-traded call options are not issued by firms.Bloomberg Financial Dictionary

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1. On securities markets a warrant is an instrument ( instruments) issued by a company giving the holder the right to subscribe for new shares in the company at an agreed price (the strike price or exercise price) on an agreed date or range of dates. Dresdner Kleinwort Wasserstein financial glossary

2. A term used on the LME, this is a certificate which evidences the possession of metal in an LME warehouse. When the short side of a futures contract effects delivery according to his contractual obligations, he delivers the warrants representing the amount of metal he is required to deliver to the long side of the contract, and not the actual physical metal itself, which remains in the LME approved warehouse it is stored in.

3. The cheque paying interest on gilts or National Savings products such as premium bonds. Dresdner Kleinwort Wasserstein financial glossary

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A certificate giving the holder the long-term and at times perpetual privilege but not the obligation of purchasing securities at a specified price. Exchange Handbook Glossary

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Speculative financial instrument issued by credit institutions and used to buy ( call warrant) or sell ( put warrant) the underlying ( share, bond, index) at a set price on a pre-arranged date NYSE Euronext Glossary

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▪ I. warrant war‧rant ¹ [ˈwɒrənt ǁ ˈwɔː-, ˈwɑː-] noun [countable]

1. also share warrant, stock warrant FINANCE an official document giving someone, usually an existing shareholder, the right to buy shares in a company. Warrants are similar to rights issue S, except that holders usually have longer to use them:

• The warrant entitles the company to buy 300,000 common shares for $18.50 each.

• Each £5,000 bond carries one stock warrant exercisable five years from now.

ˈbond ˌwarrant FINANCE

the right to buy particular bonds in the future at a particular price

ˈcovered ˌwarrant FINANCE

a warrant that is owned by a person selling the related shares and who is able to sell them without having to first buy the shares elsewhere

ˈdividend ˌwarrant FINANCE

a cheque sent by a company to a shareholder in payment of dividends; = dividend check AmE

2. LAW an official document giving someone the legal authority to do something:

• The attorney's office filed a warrant seeking the forfeiture of the illegal assets.

• According to the arrest warrant, one of his victims was a widow with nine children.

[m0] ▪ II. warrant warrant ² verb [transitive]

to promise that something is true or to guarantee that something will happen:

• Investors expect the auditors to warrant information contained in the accountants' report.

• If the purchaser wishes specific matters to be warranted, these should be set out in detail in the contract.

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A type of financial instrument attached to a security that has a separate life and value. A warrant allows the investor to purchase ordinary shares at a fixed price over a period of time (years) or to perpetuity. The price of the shares is usually higher than the market price at the time of issue. A warrant is freely transferable and can be traded separately. Warrants are usually issued by companies for their own shares, or the shares of a subsidary. Covered warrants are issued by banks, for the shares of other companies, or for use as a trading instrument.

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Ⅰ.

warrant UK US /ˈwɒr^ənt/ noun [C]

► FINANCE the right to buy a company's shares at a particular price by a particular date: »The company has the right to exercise warrants for the stock, up to a maximum of 5% of the total shares outstanding.

► LAW a legal document that gives someone, for example, the police, the authority to do something: »an arrest warrant

→ See also BOND WARRANT(Cf. ↑bond warrant), COVERED WARRANT(Cf. ↑covered warrant), DIVIDEND WARRANT(Cf. ↑dividend warrant), SHARE WARRANT(Cf. ↑share warrant), STOCK WARRANT(Cf. ↑stock warrant), WAREHOUSE WARRANT(Cf. ↑warehouse warrant)

Ⅱ.

warrant UK US /ˈwɒr^ənt/ verb [T]

► to promise that something is true, or say that it is certain that something will happen: »Our products are warranted against defects in materials and workmanship.

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