Definition for : Deferred Purchase Price

The "Deferred Purchase Price" (in abbreviated form the "DPP") designates a payment mechanism whereby a portion of the purchase price is not paid up-front, but later. Frequently, both in Mergers & Acquisitions transactions and in structured bonds ones (such as Securitisations), the DPP is used to reflect a post-sale fluctuation in the Value of the Assets transferred. In the context of a Securitisation (E.g. of Trade receivables), the DPP is a key part of the Credit enhancement tools.

(See Chapter 43 Corporate governance of the Vernimmen)

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