easy · Asset-Backed Securities
In a monthly distribution for a sequential-pay Auto ABS, USD 3.31 million in principal collections is available. Class A has an outstanding balance of USD 190 million, and Class B has an outstanding balance of USD 55 million. The documents pay Class A principal before Class B principal.
How is the available principal allocated?
- Principal is divided pro-rata: $2.57 million to Class A and $0.74 million to Class B
- The $3.31 million is used to fund the Reserve Account first
- The entire $3.31 million is paid to Class A
- The principal is paid to the Residual holder until Class A reaches its target pool factor
Sign up free to see the explanation and track your rank →
More Asset-Backed Securities practice
- Which vehicle was specifically created by the Tax Reform Act of 1986 for this asset class?
- What is the most likely tax structure?
- Given the real estate collateral, which tax vehicle is standard for this multi-class trans
- In a two-step auto-loan securitization, the originator first… — What is the principal lega
- Under ASC 860, which condition must be met for a transfer of receivables from an originato
- Why does it covenant NOT to incur additional debt?
- A CLO manager is actively buying and selling senior secured… — Which phase of the transact
- Which explanation best identifies the additional spread components in the non-agency bond?