Setoff

Definition

Money held on behalf of a borrower that may be applied to repay the loan, but usually without the permission of the borrower.

Investing Essentials

Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University


Term of the Day

Covenant defeasance
Covenant defeasance allows the issuer to remove the bond's covenants by placing the remaining payments with a trustee in escrow to be paid out on schedule.

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