Novated financial definition of novated
novation (redirected from novated)
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1. The transfer of a contract from one party to another by mutual consent of the original counterparties
and the concurrence of the new party.
2. See: Rollover
The substitution of one debt with another debt.
The substitution of a new contract, debt, or obligation for an existing one. Usually encountered when a tenant assigns the lease to another,or when a new building owner requires all existing tenants to execute novation agreements.The effect is to extinguish all obligations under the old agreements and replace them with the new obligations.
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Historical gross losses by quarterly vintage for novated
leases (cars) range from 0.3% to 1.6%; non-novated leases (cars) from 1.0% to 3.5%; trucks 0.5%-5.4%; equipment 0.2%-5.0%; and consumer 0.8%-5.0%.