Coupon leverage

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Aspect of interest rates

title: "Coupon leverage" type: doc version: 1 created: 2026-02-28 author: "Wikipedia contributors" status: active scope: public tags: ["interest-rates"] description: "Aspect of interest rates" topic_path: "technology/web" source: "https://en.wikipedia.org/wiki/Coupon_leverage" license: "CC BY-SA 4.0" wikipedia_page_id: 0 wikipedia_revision_id: 0

::summary Aspect of interest rates ::

Coupon leverage, or leverage factor, is the amount by which a reference rate is multiplied to determine the floating interest rate payable by an inverse floater. Some debt instruments leverage the particular effects of interest rate changes, most commonly in inverse floaters.

As an example, an inverse floater with a multiple may pay interest a rate, or coupon, of 22 percent minus the product of 2 times the 30-day SOFR (Secured Overnight Financing Rate). The coupon leverage is 2, in this example. The reference rate is the 30-day SOFR.

References

References

  1. "Coupon leverage". Risk Glossary.
  2. Marshall, John Francis. (2000). "Dictionary of Financial Engineering: Over 2,000 Terms Explained". [[John Wiley & Sons]].
  3. "Coupon leverage". DG Commercial Loans.

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interest-rates