Interest Only Strip

Interest Only Strip

A derivative security whose cash flow derives exclusively from interest payments on various debt securities. That is, the underlying asset of an interest-only strip is interest paid on debt securities, rather than the debt securities themselves. Many interest only strips are backed by mortgage interest, but some are also backed by Treasury securities and other debt securities. Interest-only strips are derived from bonds whose coupons are legally separated, or "stripped", from the bonds themselves.
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Pursuant to the securitisation, USD238m of Structured Pass-Through Certificates and an X1 interest only strip were issued and guaranteed by Freddie Mac.
The results of operations of the Financial Services business now look similar to the historical managed presentation for financial performance of the total managed portfolio of credit card loans, excluding income derived from the changes in the valuation of our interest only strip, cash reserve accounts, and cash accounts associated with the securitized loans.
The decrease is attributable to gains on sales of interest only strip securities of $9.
Mandia, "Our total expenses as a percentage of total revenues held steady despite the non-cash charge associated with a valuation adjustment of our interest only strip.
An increase in the prepayment assumptions used to calculate the value of the Bank's interest only strip and servicing asset related to sold guaranteed SBA loans.
Also impacting results was a reduction in the Company's Interest Only Strip ("IO Strip") of approximately $10 million which strengthened the balance sheet.
The orders arise out of the previously disclosed restatement of Doral Financial's financial statements to correct the accounting for certain mortgage loan sale transactions and the valuation of the Company's interest only strips.
Then on April 19, 2005, the Company announced that it had determined that "it is appropriate to correct the methodology used to calculate the fair value of its portfolio of floating rate interest only strips ("IOs").
We currently estimate that the change in our valuation model will result in a reduction in the recorded fair value of our floating rate interest only strips (IOs) of approximately $600 million.
Specifically, defendants orchestrated a massive accounting fraud through which they improperly valued Doral's Interest Only Strips ("IOs") and mislead investors as to the Company's vulnerability to interest rate increases.
Then on April 19, 2005, the Company announced that "after consulting with various financial institutions and other firms with experience in valuation issues, the Company has determined that it is appropriate to correct the methodology used to calculate the fair value of its portfolio of floating rate interest only strips ("IOs").
The Complaint alleges that Defendants orchestrated a massive accounting fraud through which they improperly valued the Company's Interest Only Strips ("IOs") and misled investors as to the Company's vulnerability to interest rate increases.