Paydown

This occurs when the amount a company or government repays in debt exceeds the amount they currently borrow. A Paydown takes place when a company reissues unpaid debt for less than the initial issue. For example, if a company pays $8,000,000 in corporate bond maturities and issues $5,000,000 in new bonds then the company has $3,000,000 less in debt because it has paid down its debt.

Paydown is also when a mortgage borrower pays the principal and interest of a mortgage. In doing so, the borrower is paying down his or her debt. In general, Paydown also refers to repayment of any outstanding loan. It could mean paying down a car loan, credit card debt, school loan or any other type of debt.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Paydown — In a Treasury refunding, the amount by which the par value of the securities maturing exceeds that of those sold. The New York Times Financial Glossary * * * paydown pay‧down [ˈpeɪdaʊn] noun [countable] FINANCE a payment of part of a debt * * *… …   Financial and business terms

  • paydown — / peɪdaυn/ noun a repayment of part of a sum which has been borrowed …   Dictionary of banking and finance

  • paydown — Repayment of loan but in an amount less than entire principal of loan. See also payment (part payment) …   Black's law dictionary

  • Paydown Factor — The portion of cash subtracted each month from the principal of a mortgage security divided by the original principal of the security. Security issuers are required by the GNMA to supply the paydown factor every month. This fraction can be used… …   Investment dictionary

  • pay down sth — UK US pay down sth Phrasal Verb with pay({{}}/peɪ/ verb (paid, paid) US ► FINANCE to pay part of an amount of money that you have borrowed, reducing the total debt: »The group is expected to sell its television assets to begin to pay down debts… …   Financial and business terms

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