Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

NOTIONAL PRINCIPAL Definition & Legal Meaning

Definition & Citations:

The principal amount of the underlying debt that is referred to in interest rate swap deals. When the obligation to pay interest is discounted, the principal amount gains a fictitious attribute that results in the generation of a cash flow that depends on the terms of the swapping agreement.

Disclaimer

This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.