--%>
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 : Rate of inflation Normal 0 false false

    Normal 0 false false

    		•
  • Q : Explain Governors Budget Summary or

    Governor's Budget Summary (or A-Pages): This is a companion publication to the Governor’s Budget which outlines the Governor’s goals, policies, and objectives for the budget year. This gives a perspective on important fiscal and/or structu

    		•
  • Q : All rates are stated annually with

    1.      Assume the following (all rates are stated annually with semiannual compounding):

  • Q : Define the term floor Floor: The

    Floor: The Assembly or Senate chambers or the word employed to explain the location of a bill or the kind of session. Matters might be termed to as “on the floor”.

    		•
  • Q : Examples of high debt levels companies

    Give two instances of types of companies which would be best able to handle high debt levels.Companies which handle local telephone service and those which handle natural gas delivery to consumers would be assumed to comfortably be able to handl

    		•
  • Q : Explain Budget Cycle Budget Cycle : The

    Budget Cycle: The time period needed to made a state financial plan and enacts that part of it applying to the budget year. The Significant events in the cycle comprise: • The preparation of G

    		•
  • Q : Supply and demand 1. Albert Jones went

    1. Albert Jones went to his local department store to purchase a pair of Levi s. He thought that the style of Levi that he wanted would sell for about $30 a pair. When he got to the store, he saw a sign which said, Levi s, all styles, $18 a pair. Albert bought three pairs of Levi s. The behavior of

    		•
  • Q : Describe patterns of cash flows for

    Describe two patterns of cash flows for a share of common stock. How does the market find out the value of the most common cash flow pattern for common stock?Cash flows for share of common stock contain dividend payments and the price attained f

    		•
  • Q : Define Sponsor Sponsor : It is an

    Sponsor: It is an individual, group, or organization which initiates or brings to a Legislator's attention a proposed law modification.

    		•
  • Q : Define Appropriations Limit

    Appropriations Limit, State (SAL): The constitutional limit on the expansion of some appropriations from tax proceeds usually set to the level of the previous year's appropriation limit as adjusted for modifications in cost of living

    		•