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Glossary

Paying Agent

Category — Market Participants
A paying agent is a legal entity, usually a bank trust department or a trust company, which accepts payments from a security issuer (dividends, coupon and basic payments) and distributes the funds among holders. A paying agent which is responsible for the payment of interest and a principal debt is usually indicated in a bond agreement. A paying agent is an intermediary which receives payment for its services.

Investment banks acting as paying agents may also provide related services, such as:
• Automation of a dividends/interest payment process;
• Processing and structuring of necessary documentation.
Let us consider an example of RZD, 7.45% 18sep2028, RUB. On the issue page, in the “Participants” tab, we see that the paying agent for this issue is BNY Mellon. We can also check the information on the paying agent in the Eurobond Prospectus; the list of all participants is usually at the very end of the document.

A Paying Agent Agreement is usually drawn up. There are many examples of such agreements; banks have their own standards as a rule. A paying agent fixes an agreement date, indicates the parties involved and their data in this agreement. Moreover, these agreements include all offer details, such as principal debt and coupon amounts, and all payment terms and methods.
An example of such an agreement can be seen in the issue: Kazakhstan Temir Zholy, 6.95% 10jul2042, USD
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