Interest-only strip


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Related to Interest-only strip: IO Strips

Interest-only strip (IO)

A security based solely on the interest payments from a pool of mortgages, Treasury bonds, or other bonds. Once the principal on the mortgages or bonds has been repaid, interest payments stop, and the value of the IO falls to zero.

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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These factors were partially offset by a decrease in non-interest income primarily from the 2011 gain on sale of an SBA interest-only strip security and an increase in non-interest expense.
Because income not recognized in the interest-only strip will generally be recorded as excess servicing income in future periods, the impact in any given year is also affected by the forward impact of the adjustments made in prior periods including a carry-over effect into 2005.
7 million non-cash adjustment to the value of the Company's interest-only strips to account for the impact of increased loan prepayments being experienced throughout the mortgage industry because of borrower refinancing and lower interest rates.
While the bulk of the notes will be 'AAA' rated senior notes, this is the first time investors will have been publicly offered a (preliminary) 'BB' rated mezzanine tranche and an interest-only strip in an Australian RMBS deal.
4 million interest-only strip receivable, and their related bank debt.
Class X is an interest-only strip that pays excess interest based on its notional amount, initially $124,062,395.
4 million of Agency MBS Inverse Interest-Only strips, $2.
1 million payment due to an unnamed lender, which PacificAmerica says at this point is requiring only payments on the interest-only strips receivable securing the financing.
Some of these REITs also are investors in interest-only strips, which plummet in value in high prepayment situations.
Realized loss on Agency Interest-Only Strips -- accounted for as derivatives
The guidance addresses the risk-based capital treatment for (1) split or partially rated instruments, (2) nonqualification of corporate bonds or other securities for the ratings-based approach, (3) spread accounts that function as credit-enhancing interest-only strips, (4) audits of internal credit risk rating systems, and (5) cleanup calls.
The guidance addresses risk-based capital treatment pertaining to (1) split or partially rated instruments, (2) nonqualification of corporate bonds or other securities for the ratings-based approach, (3) spread accounts that function as credit-enhancing interest-only strips, (4) audits of internal credit-risk rating systems, and (5) cleanup calls.