Pay-up

Pay-up

The loss of cash resulting from a swap into higher-priced bonds or the need/willingness of a bank or other borrower to pay a higher rate of interest to get funds. Used in the context of general equities. (1) When an investor who wants to buy a stock at a particular price hesitates and the stock begins to rise; instead of letting the stock go, he "pays up" to buy the shares at the higher prevailing price. (2) Buy shares in a high-quality company at what is felt to be a high, but supportable, price due to its quality.

Payup

1. A swap for a security with a higher yield. For example, an investor may swap a bond with a certain face value and coupon for another bond with an equal face value but a higher coupon. One refers to the extra funds the investor yields from the higher coupon as a payup.

2. The additional money an investor needs in order to buy a security with a higher market value. For example, an investor may need payup money if he/she owns a bond, but wishes to buy another bond with a higher coupon rate.
References in periodicals archive ?
The weighted average market pay-up for our specified pools decreased to 0.
On the asset side, we believe that specified pools have become more attractively priced as a result of the recent cheapening in pay-ups, and after reducing our exposure earlier in the second quarter, we re-established our exposures to pay-ups at what we think are extremely attractive entry points.
We took advantage of the volatility in pay-ups to harvest some gains early in the quarter, and then re-establish our exposure to pay-ups at cheaper levels later in the quarter.
However, notwithstanding the variation in pay-up appreciation across specified pool sectors, the weighted average pay-up for our specified pools increased significantly to 1.
This development enhanced the value of our specified pools, as evidenced by the significant increase in our average pay-ups.
Over the years while I was executive director of the newsletter association nothing we could do to our conversion series ever changed our pay-up rate on bill-me orders from about 67 percent.
If you sell to Fortune 1000 companies, the eventual pay-up is pretty high.
Not only did the lower price bring in more than twice the total orders and just about twice the net profit ratio, but the percentage of pay-ups was higher.
Try "17 Tested Techniques to Increase Your Bill-me Order Pay-Ups," something the subscriber can put on his shelf and think, "Now I have that
Pay-ups are price premiums for specified pools relative to their TBA counterparts.
Third, pay-ups (price premiums over corresponding TBA prices) for specified Agency pools have experienced a substantial contraction.
Publishers I've spoken with have widely different reports on eventual pay-ups.