easy · Asset-Backed Securities
If a transaction is 'sequential-pay' within the Class A tranches (A-1, A-2, A-3) but 'pro-rata' relative to the Class B, what does this mean?
- A-1, A-2, and A-3 are paid in order, but as a group they share principal with Class B
- All classes are paid at the exact same time
- Only interest is paid to Class A, while all principal goes to Class B
- Class B must be retired before Class A can receive any principal
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