Maintenance and Replacement Fund
A fund provided in most electric utility mortgage indentures requiring minimal annual property additions based on a percentage of revenues and/or assets to maintain or replace depreciable property. Deficiencies must usually be made up by deposit of cash, bonds or additional unfunded property. Deposited cash can often be used to redeem bonds at the special (lower) call price which frequently does not carry refunding protection.

Maintenance Margin
The amount to which the initial margin for a futures position may be depleted by adverse price changes before additional margin is required to restore the initial margin amount.

Maloney Act of 1938
Legislation allowing the over-the-counter market to establish the National Association of Securities Dealers to regulate itself. It was designed to protect the public from unfair practices and insure continued public confidence in the securities industry.

Management Fee
A fixed percentage (usually 20%) of the gross underwriting spread which accrues only to the managers.

Manager
A firm which deals with the issuer of securities on behalf of the underwriting group. There may be a number of co-managers, but only the one "running the books" is directly responsible for distributing securities throughout a syndicate.

Margin
The difference between the market value of collateral pledged to secure a loan and the face value of the loan itself.

Margin Call
A call for cash in a margin position.

Market
1. The prices at which a security can actually be bought and/or sold.
2. A locale where a security is known to be traded.

Market Amount
Market price times Quantity.

Market Order
An order given to buy or sell a particular security at the best immediately obtainable price.

Market Price
The most current price of a security.

PIMCO prices securities by using the following sources:

Agencies, Treasuries, Preferred Stocks: Interactive Data Service.

CMOs, Pass-Throughs, & Strips: An in-house Duration Model based on a treasury yield spread. These securities are compared to treasuries with similar features such as coupon and maturity date and given like prices.

Private Placements, Corporate Bonds: Merrill Lynch pricing source.

Market prices are also obtained from other services such as Bloomberg, Reuters and various market makers.

Market Risk
The risk that current interest rates may change and thus adversely affect current market prices.

Market Value
Market price times quantity.

Marketability
The ease with which an asset can be sold at a given price.

Master Page
A Process Charter page where text is stored that is displayed on all pages for the one file; i.e. team name, file name, modified date.

MAT
Maturity

Match Book
The collection of repurchase and reverse repurchase agreements done with customers. Securities acquired through reverse repurchase agreements are "matched," or paired off, against a repo on the same security for the same period of time. The investment banker running the march book acts as principal in all transactions and incurs any liabilities. Repos done to finance dealer positions are not considered part of the match book.

Matched Sales
The opposite of repurchase agreements. In the context of match book operations, refers to lending money and taking securities as collateral. In reference to Federal Reserve actions, a means of temporarily absorbing reserves by selling securities under and agreement to subsequently repurchase them. Also known as Reverse Repurchase agreements.

Maturity
The date on which a loan, bond, mortgage or other debt security becomes due and is to be paid off.

Member Firm
A securities brokerage firm having one or more partners or officers who are members of the New York Stock Exchange.

MERC
Chicago Mercantile Exchange

Method or System of Issue
Auction: A method of issue where brokers or dealers submit bids to the issuer on either a price or yield basis. Auction rules vary considerably across markets.

Competitive Auction: There are two types of competitive auctions: English and Dutch. In an English auction, bidders buy bonds at their bid price if they bid above the stop price. In a Ditch auction, bidders buy bonds at the stop price as long as their bid prices are above the stop price. For an oversubscribed auction, bids at the stop price are scaled proportionately.

Non-Competitive Auction: An auction at which bidders receive bonds at the average price.

Subscription Offering: Practice of issuing a security(s) by allotment to distributors or a syndicate who agree to distribute the issue(s) by pro-curing subscribers. The terms of the issue(s) are widely publicized in advance.

Syndicate: A group consisting of managers, underwriters and selling groups that is responsible for distributing new issues or taps.

Tap (or reopening): A method of reissuing an already existing bond, also the term used to describe such an issue.

Mobile Homes
Mobile home mortgage pass-through securities issued by GNMA.

Modern Portfolio Theory
The theoretical framework for designing investment portfolios based upon the risk and reward characteristics of the entire portfolio, which is held not to be equivalent to the aggregation of the individual securities of the portfolio. The major tenet of the theory holds that reward is directly related to risk, which can be divided into two basic parts: 1) systematic risk (portfolios' behavior as a function of the market's behavior), and 2) unsystematic risk (portfolios' behavior attributable to selection of individual securities). Because un-systematic risk can be largely eliminated through diversification, the portfolio will be subject principally to systematic risk.

Mortgage
A conveyance of an interest in real property given as security for the payment of a debt.

Mortgage Banker
A firm that supplies its own funds for mortgage loans which are later sold to permanent investors. Usually they continue to service the loans for a specified fee.

Mortgage Bond
A bond backed by a lien against real property.

Mortgage Insurance
A type of term life insurance often bought by mortgagors. The amount of coverage decreases as the mortgage balance declines. In the event that the borrower dies while the policy is in force, the debt is automatically repaid by insurance proceeds.

Mortgage-Backed Securities
Bonds which are a general obligation of the issuing institution but are collateralized by a pool of mortgages.

Mortgagor
One who borrows money, giving as security a mortgage or deed of trust on real property; a debtor.

MOTORCYCLES
Guaranteed Mortgage Certificate

MPT
Modern Portfolio Theory

MTG
Mortgage

MUNI
Municipal

Municipal
Debt obligation of a state or local government.