# Glossary

> Part of the *Music ABS and Institutional Readiness* knowledge base. See `INDEX.md` for the full map.

**Anticipated repayment date (ARD)** — The date the issuer plans to refinance, typically 5 to 10 years after closing; if refinancing does not occur, the notes shift into full-turbo principal repayment until retired.

**Bankruptcy-remote SPV** — A special purpose vehicle created solely to hold securitized assets and issue debt against them, structured so that a bankruptcy of the sponsor cannot reach the assets owned by the SPV.

**Black-box income** — Royalty income that is collected by a collection society or DSP but cannot be matched to a specific rights holder due to incomplete metadata or registration gaps; eventually distributed by market share rather than to the rightful owner.

**Capture rate** — The share of theoretical royalty entitlement actually collected by a rights holder; the operational metric most directly improved by metadata, registration, and administration discipline.

**Cash trap (and full cash trap)** — DSCR-triggered protective responses that redirect excess cash flows from the equity holder into a reserve (cash trap) or fully capture excess cash (full cash trap) when performance deteriorates below defined thresholds.

**Catalog Maturity Curve** — Standard Innovation's four-stage framework (Manual → Operational → Automated → Proactive) that maps a music platform's operational maturity against investor confidence and capital access. See `03 - The Five Drivers (overview).md`.

**Debt service coverage ratio (DSCR)** — The ratio of cash flow available to service debt to scheduled debt service over a defined period, with rated music ABS typically requiring trailing cushions of 1.5x or more.

**Delayed-draw feature** — A master trust feature allowing the issuer to raise additional notes after closing to fund future acquisitions, subject to rating-agency confirmation and continued credit profile.

**Dodd-Frank risk retention** — A regulatory requirement that the sponsor retain at least 5% of a securitization's credit risk in an unhedgeable form for the life of the deal, immobilizing sponsor capital that would otherwise be available for new acquisitions.

**DSP (Digital Service Provider)** — A digital music platform that streams or distributes music (Spotify, Apple Music, Amazon Music, YouTube Music, etc.) and reports royalties to rights holders on a defined cadence.

**Insurance general account** — The proprietary investment portfolio of a life or annuity insurer, and the dominant buyer base for long-tenor rated ABS due to its long-duration asset-liability management profile.

**IPI/CAE identifier** — The Interested Parties Information code (formerly CAE) issued by the CISAC global database to uniquely identify writers and publishers across PRO societies worldwide.

**ISRC (International Standard Recording Code)** — A unique 12-character identifier for a specific sound recording, used to track royalty distribution and rights ownership for masters.

**ISWC (International Standard Musical Work Code)** — A unique 11-character identifier for a specific musical composition (the underlying work), used to track royalty distribution and rights ownership for publishing.

**Loan tape** — A row-per-asset detailed data file used by rating agencies, structuring agents, and surveillance to underwrite and monitor an ABS pool; for music ABS, requires song-level revenue history, registration status, splits, vintage, and territory data.

**Master trust** — A securitization structure in which one SPV issues successive series of notes against an evolving collateral pool, amortizing legal and structural setup cost across all subsequent issuances.

**Match-funding** — The pricing of long-duration assets against long-duration, fixed-rate liabilities held by buyers whose portfolios run on the same maturity profile, removing interest-rate and refinancing mismatches.

**MLC (Mechanical Licensing Collective)** — The U.S. collective established under the 2018 Music Modernization Act to administer blanket mechanical licenses for digital streaming services and distribute royalties; manages the "unmatched royalty pool" referenced in `03d - Data Infrastructure.md`.

**NRSRO** — A Nationally Recognized Statistical Rating Organization, the SEC designation for rating agencies (KBRA, Moody's, S&P, Fitch, DBRS Morningstar) whose ratings carry recognized regulatory status.

**Overcollateralization (OC)** — A credit enhancement in which collateral value held in the SPV exceeds notes outstanding by a defined ratio (typically 1.5x to 2.5x in rated music ABS), absorbing cash flow variability before noteholders experience loss.

**Phonorecords V** — Copyright Royalty Board proceeding initiated December 2025 to set statutory mechanical royalty rates for the 2028 to 2032 rate period; principal medium-term regulatory variable for U.S. music royalty cash flows. See `04 - Outlook.md`.

**PRO (Performing Rights Organization)** — Societies that license and collect public performance royalties on behalf of songwriters and publishers; in the U.S., ASCAP, BMI, SESAC, and GMR.

**Qualified Institutional Buyer (QIB)** — An SEC-defined category of institutional investor (broadly, with at least $100 million in securities under management) eligible to purchase securities sold under Rule 144A private placements.

**Rapid amortization** — The deepest DSCR-triggered protective response in a rated ABS structure, redirecting all available cash to senior principal repayment until the notes are retired.

**Rule 144A** — The SEC exemption that permits resale of unregistered securities to QIBs, the framework under which rated music royalty ABS to date has generally been issued.

**Section 4(a)(2)** — Statutory exemption from SEC registration for non-public offerings; used as the structural basis for privately negotiated rated ABS where deeper issuer-investor disclosure is exchanged.

**Sub-publisher** — A territorial publisher that administers rights in a foreign market on behalf of the original publisher; routability of sub-publisher collections to the trustee-controlled lockbox is a critical structural element. See `03c - Legal Architecture.md`.

**True sale** — A legal determination that the transfer of assets from sponsor to SPV is final and not subject to recharacterization, ensuring that a sponsor bankruptcy cannot claw back the transferred assets.

**Variable Funding Note (VFN)** — A class of note typically used to hold the sponsor's risk-retention interest in an unhedgeable form; functions as the first-loss tranche corresponding to the sponsor's continued equity in the catalog.

**Waterfall** — The contractual priority order in which cash flowing into the SPV must be applied (senior fees → Class A interest → Class A principal → subordinated tranches → reserves → equity). See `02 - Structure of Music ABS.md`.
