--%>
Assignment Help - homework help

Four-Tranche Sequential-Pay Structure

1. How would you fund the tranche Z of the example in the securitization manual?

2. What reinvestment rate from the excess spread will guarantee that there will be sufficient money to pay0ff creditors of tranche Z?

3. When tranche Z creditors will get their final check?

Four-tranche pass-through created from the underlying collateral with WAC of .2052, WAM of 102 months, and weighted average pass-through rate of 19 percent Assuming 3 percent prepayment after 18 months for 10-year residential mortgages in Iran

 

Par Amount

Coupon Rate

Maturity in Months

Principal Pay-down Window In Months*

Average Life**

In year

Tranche A

21,250,000,000

0.174

24

23

1.04

Tranche B

21,250,000,000

0.181

43

20

2.82

Tranche C

21,250,000,000

0.190

61

18

4.40

Z Bonds

21,250,000,000

0.215

 

 

 

Total collateral

IR850 billion

 

 

 

 

Pass-through Rate

 

0.190

102

 

4.96    years

WAC of Collateral

 

0.2052

 

 

 

WAM of Collateral

 

102 Months

 

 

 

1.This is the time period between the beginning and the end of total principal payments to a tranche.

2.This is the average time to receipt of principal amounts (scheduled principal payment and projected prepayments), weighted by the amount of expected principal.

   Related Questions in Finance Basics

  • Q : Short run and long run influence Normal

    Normal 0 false false

  • Q : Define the term Technical Technical :

    Technical: In the budget systems, refers to an amendment which clarifies, accurate, or else does not materially influence the purpose of a bill.

    		•
  • Q : Describe Section 28.50 Section 28.50 :

    Section 28.50: It is a Control Section of the Budget Act which authorizes the Department of Finance to increase or reduce the reimbursement line of an appropriation schedule for the reimbursements received from agencies of other state. It too contains

    		•
  • Q : Explain Modified Accrual Basis Modified

    Modified Accrual Basis: The base of accounting in which revenues are acknowledged when the underlying transaction has occurred as of the last day of the fiscal year and the quantity is measurable and accessible to finance expenditures

    		•
  • Q : What do you mean by Authorized What do

    What do you mean by Authorized: Provided the force of law (example, by statute). For certain action or quantity to be authorized, it should be possible to recognize the enabling source and date of approval.

    		•
  • Q : Explain Encumbrance Encumbrance : The

    Encumbrance: The commitment of all or portion of an appropriation for future expenses. The Encumbrances symbolize commitments associated to unfilled purchase orders or unfulfilled contracts. Exceptional encumbrances are recognized as budgetary expense

    		•
  • Q : Define Senate Senate : The higher house

    Senate: The higher house of California’s Legislature comprising of 40 members. As an outcome of Proposition 140 (that is, 1990, term limits) and Proposition 28 (that is, 2012, limits on Legislators’ terms in office), members chosen in or a

    		•
  • Q : Would there be positive interest rates

    Normal 0 false false

    		•
  • Q : Explain Year of Budget Year of Budget

    Year of Budget (YOB): In this the fiscal year revenues and expenses are recognized. For revenues, this is usually the fiscal year whenever revenues are earned. For expenses, this is usually the fiscal year whenever obligations, compri

    		•
  • Q : Four-Tranche Sequential-Pay Structure

    1. How would you fund the tranche Z of the example in the securitization manual? 2. What reinvestment rate from the excess spread will guarantee that there will be sufficient money to pay0ff creditors of tranche Z? 3. When tranche Z creditors will get

    		•