Glossary of Municipal Securities Terms

YIELD REDUCTION PAYMENT

A payment permitted by the tax regulations in certain situations made by an issuer to the federal government in order to reduce the yield on investment of bond proceeds to meet yield restriction requirements under the Internal Revenue Code and thereby protect the tax-exempt status of the bonds. See: ARBITRAGE; YIELD RESTRICTION. Compare: ARBITRAGE REBATE.

Search the Glossary

 

Browse Terms by Letter