stressed PAC

stressed PAC
A planned amortization class ( PAC) CMO tranche in a CMO experiencing rapid prepayments of underlying collateral. The PAC tranche is still performing within expected ranges, ( i.e., it is not a busted PAC); however, the support tranches are under strain. A stressed PAC will become a busted PAC if the prepayments continue at or near their current speed.

Financial and business terms. 2012.

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