medium · Asset-Backed Securities
Class A-1 and Class A-2 are senior sequential tranches. Class A-1 has been paid down to $1M. This month, the pool generates $5M in total principal.
According to the sequential waterfall, how is this $5M distributed?
- 2.5M to Class A-1 and2.5M to Class A-2.
- 1M to Class A-1 and4M to the reserve account.
- 1M to Class A-1, then4M to Class A-2.
- $5M to Class A-2, as Class A-1 is now considered 'de minimis'.
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