Cumulative net loss (CNL)
Asset-Backed Securities glossary · Cash Flow Waterfalls & Triggers
Definition
Total losses (net of recoveries) over the life of a pool, typically expressed as a percentage of original balance.
Cumulative net loss (CNL) in plain English
When you own a pool of loans, you care about the total damage over the pool's entire life — not just this month. Cumulative net loss adds up every dollar the pool has lost to defaults from day one, subtracts anything recovered (say, money clawed back by seizing and selling a car or house), and shows the result as a percentage of what the pool started with. So a 3% CNL means that, all told, 3 cents of every original dollar vanished. It's the running scoreboard of how much a pool of loans actually cost its investors, like tallying total spoilage in a warehouse across the whole year rather than just today.
Also called: CNL
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