# Nelson-Siegel Curve Fitting

*Quant & Pricing — Finicade finance glossary*

Nelson-Siegel fits a yield curve with a few parameters mapping to level, slope and curvature — the three factors behind almost all curve moves.

Nelson-Siegel fits a yield curve with a handful of parameters that map onto level, slope and curvature — the three factors that explain almost all curve movement. Unlike bootstrapping it doesn't reprice every bond exactly, and that's the point: central banks use it to smooth through the noise of individual illiquid issues. The Svensson extension adds a second hump for curves that need more shape at the long end.

**Also known as:** Nelson-Siegel, Svensson model, parametric yield curve

**Related terms:** [Yield Curve](https://finicade.com/glossary/yield-curve), [Curve Bootstrapping](https://finicade.com/glossary/curve-bootstrapping), [Zero Rate](https://finicade.com/glossary/zero-rate), [Term Premium](https://finicade.com/glossary/term-premium), [Regression](https://finicade.com/glossary/regression)

Source: https://finicade.com/glossary/nelson-siegel-curve-fitting