Page 128 - PRIAA Glossary

P
PANAMAX
A medium-sized product carrier of approximately 50,000 to 80,000 deadweight tons, most commonly carrying dirty petroleum products.
PARI PASSU
Securities or debt that have equal claim on a right, such as common stock or a parity bond.
PARTIAL TERMINATION
A reduction in the notional amount of a derivative contract.
PASSIVE INVESTMENT MANAGEMENT
An investment strategy where investments mimic a pre-determined benchmark. The benefits include low management fees, taxes and trading costs.
PATH DEPENDENT OPTION
A financial instrument whose valuation and payoff depends on the realised price path of the underlying asset, such as an Asian option or a lookback option.
PAY AS YOU GO SWAP (PAUG)
A credit default swap transaction on an underlying asset backed security (ABS) or residential mortgage backed security (RMBS) transaction. The protection seller compensates the protection buyer over the life of the transaction for any cash flow deficiencies, for example interest shortfalls, principal shortfalls or write-downs. PAUG is cash flow-driven as opposed to single event- driven as in corporate credit derivatives. Calculations and determinations are made based on the servicer report.
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