medium · Asset-Backed Securities
In a healthcare receivables ABS, what is the primary reason the 'Advance Rate' (e.g., 80% of eligible receivables) serves as credit enhancement?
- It acts as a surety bond provided by a monoline insurer.
- It creates immediate Overcollateralization because the trust owns more assets than the debt it issued.
- It guarantees that the healthcare provider will not file for bankruptcy.
- It forces the insurer to pay claims within 30 days.
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