Glossary of Terms

30/360 Also 360/360, 30(E)/360 or Accrual Basis. A day/year count convention assuming 30 days in each calendar month and a “year” of 360 days; adjusted in America for certain periods ending on 31st day of the month (and then sometimes known as 30(A)/360).

AAA The highest credit rating given by Standard & Poors for a company or asset—the risk of default is negligible. Rating scale descends, that is, AA, A, BBB, BB.

Accrual Basis Basis for accruing, for example, interest income based on number of days See 30/360.

Accrued Interest Interest due on a bond or other fixed income security from the issuer to the holder or that must be paid by the buyer of a security to its seller if purchase is between interest periods. Payment = coupon ...

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