diff --git a/java/java-impl/src/com/intellij/codeInsight/daemon/impl/analysis/HighlightMethodUtil.java b/java/java-impl/src/com/intellij/codeInsight/daemon/impl/analysis/HighlightMethodUtil.java
index 636b0331eee1..97370c856aea 100644
--- a/java/java-impl/src/com/intellij/codeInsight/daemon/impl/analysis/HighlightMethodUtil.java
+++ b/java/java-impl/src/com/intellij/codeInsight/daemon/impl/analysis/HighlightMethodUtil.java
@@ -294,9 +294,10 @@ public class HighlightMethodUtil {
                                           List<PsiClassType> checkedExceptions, PsiSubstitutor substitutorForDerivedClass) {
     PsiMethod superMethod = superSignature.getMethod();
     PsiSubstitutor substitutorForMethod = MethodSignatureUtil.getSuperMethodSignatureSubstitutor(methodSignature, superSignature);
-    if (substitutorForMethod == null) return -1;
     for (int i = 0; i < checkedExceptions.size(); i++) {
-      PsiType exception = substitutorForDerivedClass.substitute(substitutorForMethod.substitute(checkedExceptions.get(i)));
+      final PsiClassType checkedEx = checkedExceptions.get(i);
+      final PsiType substituted = substitutorForMethod != null ? substitutorForMethod.substitute(checkedEx) : TypeConversionUtil.erasure(checkedEx);
+      PsiType exception = substitutorForDerivedClass.substitute(substituted);
       if (!isMethodThrows(superMethod, substitutorForMethod, exception, substitutorForDerivedClass)) {
         return i;
       }
@@ -304,10 +305,10 @@ public class HighlightMethodUtil {
     return -1;
   }
 
-  private static boolean isMethodThrows(PsiMethod method, PsiSubstitutor substitutorForMethod, PsiType exception, PsiSubstitutor substitutorForDerivedClass) {
+  private static boolean isMethodThrows(PsiMethod method, @Nullable PsiSubstitutor substitutorForMethod, PsiType exception, PsiSubstitutor substitutorForDerivedClass) {
     PsiClassType[] thrownExceptions = method.getThrowsList().getReferencedTypes();
     for (PsiClassType thrownException1 : thrownExceptions) {
-      PsiType thrownException = substitutorForMethod.substitute(thrownException1);
+      PsiType thrownException = substitutorForMethod != null ? substitutorForMethod.substitute(thrownException1) : TypeConversionUtil.erasure(thrownException1);
       thrownException = substitutorForDerivedClass.substitute(thrownException);
       if (TypeConversionUtil.isAssignable(thrownException, exception)) return true;
     }
diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/IDEA87860.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/IDEA87860.java
new file mode 100644
index 000000000000..540ec4e4195d
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/IDEA87860.java
@@ -0,0 +1,11 @@
+interface A {
+    <T extends Exception> void foo() throws T;
+    <T extends Exception> void bar() throws Exception;
+    void baz() throws Exception;
+}
+
+interface B<T extends Throwable> extends A {
+    void foo() throws <error descr="'foo()' in 'B' clashes with 'foo()' in 'A'; overridden method does not throw 'T'">T</error>;
+    void bar() throws <error descr="'bar()' in 'B' clashes with 'bar()' in 'A'; overridden method does not throw 'java.lang.Throwable'">Throwable</error>;
+    void baz() throws <error descr="'baz()' in 'B' clashes with 'baz()' in 'A'; overridden method does not throw 'java.lang.Throwable'">Throwable</error>;
+}
diff --git a/java/java-tests/testSrc/com/intellij/codeInsight/daemon/GenericsHighlightingTest.java b/java/java-tests/testSrc/com/intellij/codeInsight/daemon/GenericsHighlightingTest.java
index 0333f9ed2769..10efbc903bbc 100644
--- a/java/java-tests/testSrc/com/intellij/codeInsight/daemon/GenericsHighlightingTest.java
+++ b/java/java-tests/testSrc/com/intellij/codeInsight/daemon/GenericsHighlightingTest.java
@@ -315,6 +315,7 @@ public class GenericsHighlightingTest extends LightDaemonAnalyzerTestCase {
   public void testIDEA67843() { doTest5(false); }
   public void testAmbiguousTypeParamVsConcrete() { doTest5(false); }
   public void testRawAssignments() throws Exception { doTest5(false); }
+  public void testIDEA87860() throws Exception { doTest5(false); }
 
   public void testJavaUtilCollections_NoVerify() throws Exception {
     PsiClass collectionsClass = getJavaFacade().findClass("java.util.Collections", GlobalSearchScope.moduleWithLibrariesScope(getModule()));