easy · Debt Capital Markets
What is the relationship between the 'Excess Spread' in a securitization and the 'Excess Cash Flow' in a corporate loan?
- One is a form of debt, while the other is a form of equity.
- They are identical terms used in different markets for the exact same calculation.
- Both represent the residual cash flow available after senior obligations and fees are paid.
- Excess spread is only used for taxes, while excess cash flow is only for interest.
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