Derivatives · glossary
The rate on a sum paid late: the payee's cost of funds plus one percentage point, 3% here. It needs no Event of Default. Atlas paid €24 of it on the part of the close-out sum still unpaid after the due date. Definition: Default Rate · Chapter 7 · Chapter 12
Explained in Chapter 7, Payments, Netting and the Calendar, of Derivatives.
Interest runs from the due date, whatever the reason for the delay. It is counted in actual days, not in the swap's 90-day quarters. The Default Rate is the payee's own cost of funding the sum, called the Termination Rate, plus 1% a year. Despite its name, it needs no Event of Default and applies to any late payment.Read Chapter 7, Payments, Netting and the Calendar →
Chapter 1 and this glossary are open to everyone; the whole edition is free to read with a free account until 31 January, and it stays open to an account opened by then.Chapter 1 of Derivatives and this glossary are free to read; the rest of the edition is in the Library, at €12 a month or €79 for a Year Pass.
the Termination Rate plus 1% per annum;Read the definition in the document →
Related terms
Where this term lives
This term is part of one complete fictional deal, with every document attached and a test after every chapter. Open Derivatives → · All terms A–Z →