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Deferred Payment Note or Bond
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(1) A bond issued to investors with payment to the issuer deferred for a fixed period, usually to facilitate the investor's use of the bond as collateral for a loan. Also called Fixed Assurance Note (FAN). (2) An equity-linked note or bond with an embedded deferred payment American option which permits early designation of a spot price as the price to be used in calculating the payout but defers the payout until maturity of the bond or note. See also Deferred Payment American Option.
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