Which term refers to a new word created by the initial letters of a phrase?

The term referring to a new word created by the initial letters of a phrase is an acronym. An acronym is formed by taking the first letters of a series of words and combining them into a new single word, often pronounced as its own word. For example, "NASA" is an acronym for the "National Aeronautics and Space Administration." This formation is distinct from an initialism, which also uses the first letters of a phrase but is typically pronounced letter by letter (like "FBI"). Abbreviation refers to shortening a word or phrase but does not specifically imply the creation of a new word from initials, and clipping involves cutting off parts of a word to make it shorter, rather than forming a new term from initial letters. Thus, the definition and characteristics of an acronym clearly align with the concept in the question.