medium · Asset-Backed Securities waterfalls
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 across the capital structure are paid simultaneously in lockstep
- Only interest is paid to Class A, while all principal collections are diverted to Class B
- Class B must be fully retired before Class A becomes eligible to receive any principal
Sign up free to see the explanation and track your rank →
More Asset-Backed Securities waterfalls practice
- Under the stated deal mechanics, how does the ARA affect monthly interest distributions?
- Which consequence follows from that provision?
- Before liquidation, what is the direct cash-flow effect?
- Does the series enter early amortization?
- If the original pool was $1,200 million and the current balance is $115 million, can the s
- If the pool generates $6.46 million in interest and all bond tranches require $4.258 milli
- If the original balance was $1,250,000,000 and the current balance is $145,000,000, how mu
- If prepayments for the month are $6M, and Class M has a $50M balance while Class B has a