medium · Asset-Backed Securities
Lender Gamma issues an auto ABS with a pool yield (WAC) of 13.50%. The structure has a servicing fee of 1.00%, and the weighted average coupon across the issued bonds is 5.25%.
If the current monthly net loss rate is 0.25% (3.00% annualized), what is the net excess spread available to the residual holder?
- 7.25%
- 4.25%
- 3.00%
- 5.25%
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