medium · Asset-Backed Securities
If a series enters 'Rapid Amortization' due to an MPR trigger breach, which bondholders receive principal payments first?
- The subordinate classes (Class C) to clear the capital stack from the bottom up
- All bondholders receive principal pro-rata to their outstanding balances
- The senior-most class (Class A) until it is retired in full
- The seller, to reimburse them for the Seller's Interest
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