PRINCIPAL ONLY (P.O.)


Meaning of PRINCIPAL ONLY (P.O.) in English

A mortgage-backed security (M.B.S. ) in which the holder receives only principal cash flows on the underlying mortgage pool. The principal-only portion of a stripped M.B.S. creates P.O. securities, all of the principal distribution due from the underlying collateral pool is paid to the registered holder of the stripped M.B.S. based on the current face value of the underlying collateral pool.

Campbell R. Harvey. Hypertextual finance English glossary.      Английский словарь гипертекстовых финансов.