DEFINITION of 'Payer'
An entity that makes a payment to another. While the term payer generally refers to someone who pays a bill for products or services received, in the financial context it usually refers to the payer of an interest or dividend payment. In an interest rate swap, payer refers to the party that wants to pay a fixed interest rate and receive a floating rate of interest.
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BREAKING DOWN 'Payer'
In the case of fixed income instruments, the issuer is the payer of periodic coupon or interest payments to the issuer. Likewise, a dividendpaying company is the payer of such dividends to investors.
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