Interest Shortfall

This Issue in United States

Interest Shortfall

Concept of Interest Shortfall in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The payment from the seller to buyer compensating for any reduced coupon payment on the underlying bond on a PAUG swap. If the reduced coupon is subsequently made up in future coupon payments this will result in an interest shortfall reimbursement from buyer to seller.

Resources

See Also

• Derivatives Contract