IO

interest-only strip ( I/O)

A form of stripped mortgage-backed security ( MBS) that only passes interest payments received from the underlying mortgage loans to the security owners. May be a real estate mortgage investment conduit ( REMIC) tranche. American Banker Glossary

————

( interest-only strip)

A security based solely on the interest payments from a pool of mortgages, treasury bonds , or other bonds. Once the principal on the mortgages or bonds has been repaid, interest payments stop, and the value of the IO falls to zero. Bloomberg Financial Dictionary