easy · Asset-Backed Securities waterfalls
In a sequential-pay principal waterfall, what happens if a performance trigger is breached in an amortizing auto ABS?
- The trust must issue subordinate notes to cover the pool's losses.
- Senior bonds receive 100% of all principal collections until fully retired.
- Principal is distributed pro-rata across all bond classes, ignoring seniority rank.
- The interest waterfall is suspended, and all cash funds principal paydown instead.
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