# prime

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## PRIME

Stands for Prescribed Right to Income and Maximum Equity, a certificate that entitles the owner to the dividend/income from an underlying security, but not to the capital appreciation of that security.

## Prime

1. In commercial banking, the best available interest rate under most circumstances. Generally speaking, only the most creditworthy customers receive the prime, but this is not always true. In any case, a prime serves as a benchmark against which other interest rates are compared. In this sense, it is also called the prime rate.

2. Describing the highest possible credit rating on a bond, either Aaa (for Moody's) or AAA (for S&P and Fitch).

2. Describing the highest possible credit rating on a bond, either Aaa (for Moody's) or AAA (for S&P and Fitch).

## prime

**1.**Of or relating to a debt security rated AAA or Aaa.

**2.**See prime rate.

## prime

To come before another creditor in terms of priority of payment should there be insufficient assets to pay all creditors.A first mortgage holder primes a second mortgage holder,who primes a later judgment creditor, who primes a general unsecured creditor. Filing for bankruptcy reshuffles the deck,as the bankruptcy trustee primes large categories of creditors.