COLLATERAL
Haircut
Reduces the recognized lending or collateral value relative to market value.
Market use
Protects against valuation and liquidation risk under the relevant framework.
What it means
Reduces the recognized lending or collateral value relative to market value.
Example
A 5% haircut on 100 collateral recognizes 95 for financing purposes.
How to interpret it
This concept should be read together with its market convention, measurement horizon and underlying instrument. BondStats presents it as an analytical reference rather than investment advice; instrument documentation and primary market rules remain authoritative.
Related Conventions
BondStats reference content is independently written. Mathematical relationships, abbreviations and market conventions are presented for educational and analytical use.