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Yield Maintenance

Yield Maintenance
Definition: Assistance from a financial institution's insurer that provided a guarantee that certain assets purchased by an acquiring institution in a resolution would yield a prescribed rate of return. In many cases, the yield on these assets could be substantially higher than the institution's cost of funding or cost of carrying the assets. Conceptually, yield maintenance and income maintenance agreements are similar in that they both essentially provide for income protection for nonperforming or low-yielding assets acquired in an assistance transaction.