Net Interest Cost (NIC)

Definition - What does Net Interest Cost (NIC) mean?

Net Interest Cost (NIC) is a calculation that measures the interest cost of a municipal issue over the life of all bonds. Most competitive underwritings for municipal securities are awarded to the syndicate that submits the bid with the lowest NIC.

Testopedia explains Net Interest Cost (NIC)

Net Interest Cost (NIC) is the total of all interest payments made by a municipal issuer over the life of all of the bonds and does not take in to account the time value of money. That is the fact that the dollars being used to make interest payments many years in the future are not worth what those dollars are worth today. The lower the NIC the lower the cost to the municipality.

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