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Payment schedule

Payment schedule Definition

The payment schedule of financial instruments defines the dates at which payments are made by one party to another on for example a bond or derivative. It can be either customised or parameterised

Paramterised Schedule

The schedule is generated based on a set of rules and market conventions to define the frequencies of the payments.

These parameters include

  • Payment Frequency (Annually, Semi Annually, Quarterly, Monthly, Weekly, Daily, Continuous)
  • Payment Day - Day of the month the payment is made
  • Date Adjustment Rule - Rule used to adjust the payment date if the schedule date is not a Business Day
    • Actual - Paid on the actual day even if it is a holiday
    • Following - Paid on the business day following the actual day, if the actual day is not a business day.
    • Modified Following Paid on the business day following the actual payment date, unless the following business day is in the next calendar month. In this case, it pays on the previous business day.
  • Start Date - Date of the first Payment
  • End Date - Also known as the Maturity date. The date of the last payment

Customised Schedule

The schedule consists of a series of dates that define exactly when payments will be made.





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