Stated Amount

The stated amount is the original principal amount of a securitised debt security. It is the amount that the issuer of the security agrees to repay to the investor on the maturity date of the security.

In Australian English, the stated amount is sometimes called the face value of the security.

The stated amount is important in securitisation because it is used to calculate the interest payments that are made to investors. The interest payments are typically calculated as a percentage of the stated amount.

The stated amount is also important in determining the risk of a securitised debt security. The lower the stated amount, the lower the risk of the security. This is because the investor is less likely to lose money if the issuer of the security defaults.

Here are some of the applications of the stated amount in securitisation:

• Calculating interest payments: The stated amount is used to calculate the interest payments that are made to investors. The interest payments are typically calculated as a percentage of the stated amount.
• Determining the risk of a security: The lower the stated amount, the lower the risk of the security. This is because the investor is less likely to lose money if the issuer of the security defaults.
• Settling trades: The stated amount is used to settle trades in securitised debt securities. When an investor buys a securitised debt security, they are essentially buying the right to receive the stated amount on the maturity date of the security.