Manufactured Payment

What is ‘Manufactured Payment’

A payment made to pass through dividend and interest payments from the borrower to the lender of those securities. Manufactured payments, represented as interest or dividend payments, occur frequently in securities lending. In such an arrangement, title to the securities passes to borrower, but the lender customarily maintains the right to payments which accrue on the security.

Explaining ‘Manufactured Payment’

Short selling is the most common situation in which one must borrow securities. In order to sell a stock short, a trader must borrow the stock. Since the short seller has borrowed the security, dividend payments made on the stock during the term of the loan must be paid to the lender. This can be a significant cost of short selling if a stock pays a high dividend yield.

Further Reading

  • Manufactured housing: A misunderstood real estate market – [PDF]
  • Export credit insurance schemes and manufactured exports with particular reference to Australia 1960-1972 – [PDF]
  • Why advocates need to rethink manufactured housing – [PDF]
  • The effect of external finance on Africa's variety of manufactured exports to the European Union – [PDF]
  • System for assembly and distribution of automobiles utilizing a plurality of partner integrators and a plurality of manufactured and service modules – [PDF]
  • The decision to purchase a manufactured home: a nested logit model of determinants – [PDF]
  • Impact Factors of Trade Terms Changes of Export Price of Manufactured Goods in China – [PDF]