A coupon payment (payoff or interest) for a structured product that has a memory feature. If activated, the product/ instrument, on any coupon observation date that the underlying hits/ breaches a coupon barrier, will not only entail payment of the current coupon but also any previous coupons that were not paid earlier because on those coupon dates the underlying did not hit/ breach the coupon barrier.
Under memory setting: payment = current coupon + any previous non-paid coupons
The memory feature is usually practical on selection of a binary coupon style.
For example, an autocallable that may come with a memory coupon as part of its structure. Even if the coupon barrier is not breached, a memory version of the autocallable (a memory coupon autocallable or an autocallable with a memory) allows the holder to receive a high coupon for a coupon date that is lost. In the memory version, the size of coupon increases on each observation date that the coupon barrier is not triggered.
A memory coupon is also known as a snowball coupon.
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