noun
General Slang
Haircut
· noun · finance
A discount applied to an asset's value, or a forced loss on a position.
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Definitions
1
The discount a lender slaps on collateral before lending against it. Post 10 million in bonds, get a 5% haircut, borrow against 9.5. The buffer protects the lender if the collateral tanks before they can sell it.
“Repo desk gave us a 7% haircut on the corporates, killed the carry trade.”
by community
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2
A forced loss bondholders or depositors eat in a restructuring. The Greek debt deal handed private creditors a haircut north of 50%. Polite word for getting clipped.
“Cyprus depositors above 100k took a brutal haircut in 2013.”
by community
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Haircut In A Sentence
Repo desk gave us a 7% haircut on the corporates, killed the carry trade.
Cyprus depositors above 100k took a brutal haircut in 2013.
Origin & Usage
Variants
hair-cut
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