INTEREST ONLY Definition

Bookmark and Share

INTEREST ONLY (IO),in securities, is the interest only portion of a stripped mortgage-backed security. For IO securities, all of the interest distribution is due to the registered holder based on the current face value of the underlying mort­gage-backed security.

Learn new Accounting Terms

MARKET DISCOUNT is the stated redemption price of a bond at maturity minus your basis in the bond immediately after you acquire it. Market discount arises when the value of a debt obligation decreases after its issue date.

COUPON is: 1) The annual interest rate on a fixed income security, set at the time it was issued, at which that instru­ment will accrue and pay interest. 2) Small pieces of paper attached to nonregistered interest-bearing instru­ments that reflect the semiannual amounts of interest to be paid. These coupons are cut out and tendered on the appropriate coupon dates, and the interest is then paid.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.