Yield Maintenance


Also found in: Acronyms.

Yield Maintenance

The extra money a prepaying borrower would have to pay to make the yield the same for the lender if the borrower made all, regularly scheduled payments until maturity. When a borrower prepays a loan or other debt investment, the lender loses the interest the borrower otherwise would have paid. The lender may charge the yield maintenance as a prepayment penalty to ensure that it makes the yield regardless of whether or not the borrower prepays. This has the effect of making prepayment or refinancing unattractive to the borrower.
References in periodicals archive ?
Securities and Exchange Commission's ("SEC") inquiry, personnel separation costs, contingent consideration charges, acceleration of deferred abatement and straight-line amortization, gains on the receipt of yield maintenance payments from the prepayment of a note receivable and acquisition costs.
The Company is permitted to make optional prepayments at any time, subject to a variable yield maintenance prepayment premium if the prepayment is made prior to November 1, 2015 and other conditions.
While properties that have freely prepay-able mortgages have been actively refinancing their mortgages, more and more owners of multifamily and healthcare properties are paying sometimes large prepayment penalties--often in the form of defeasance or Yield Maintenance payments --for the sake of locking in today's low rates for the longest term possible.
Almost all conduit loans now require the loan to be defeased rather than paid off with a prepayment fee or yield maintenance once the lock-out period expires.
The loan is interest only and can be prepaid subject to yield maintenance after 18 months.
FNA 2013-M4 is our first GeMS deal to include 10-year DUS pools with 7-years of yield maintenance, and we saw strong investor demand for these classes due to the yield pick up they offer," said Kimberly Johnson, Fannie Mae Senior Vice President of Multifamily Capital Markets.
For instance, well-heeled borrowers in New Jersey are now much more willing to pay a yield maintenance penalty--essentially a form of pre-payment penalty.
The loan is secured by an indirect pledge of the equity ownership in 339 facilities located in 30 states, is pre-payable at any time subject to yield maintenance during the first twelve months, and is mandatorily pre-payable in January 2012 unless the borrower satisfies certain financial conditions.
5 million in accrued interest and a yield maintenance premium.
5 years of yield maintenance, and a 30year amortization schedule payable on an actual/360 basis.
The loan is interest only and can be prepaid subject to yield maintenance during the first five years and with set fees the following five years.
5 years of yield maintenance and a 30--year amortization schedule payable on an actual/360 basis.