PAC Z tranche

PAC Z tranche
PAC Z tranche or PAC Z bond
A CMO Z bond with some call and extension protection provided by collars. Like other Z bonds, a PAC Z bond earns interest that is accrued but not paid in cash for a defined time period.
See Z tranche. American Banker Glossary

Financial and business terms. 2012.

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  • PAC Z bond — PAC Z tranche or PAC Z bond A CMO Z bond with some call and extension protection provided by collars. Like other Z bonds, a PAC Z bond earns interest that is accrued but not paid in cash for a defined time period. See Z tranche. American Banker… …   Financial and business terms

  • PAC tranche — planned amortization class ( PAC) tranche A REMIC security created to receive selected cash flows from a pool of underlying mortgages securing the REMIC. PAC tranches use a structure similar to a sinking fund to establish a fixed principal… …   Financial and business terms

  • PAC Bond — Stands for Planned Amortization Class bond. A tranche class offered by some CMOs that has a sinking fund schedule and an ability to make principal payments that are not subordinated to other classes. Bloomberg Financial Dictionary …   Financial and business terms

  • 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 …   Financial and business terms

  • Planned Amortization Class (PAC) Tranche — A class of tranche in a planned amortization class (PAC) bond that receives a primary payment schedule. As long as the actual prepayment rate is between a designated range of prepayment speeds, the life of the PAC tranche will remain relatively… …   Investment dictionary

  • Companion Tranche — A class of tranche found in planned amortization class (PAC) and targeted amortization class (TAC) collateralized mortgage obligations (CMOs) that absorbs variable prepayment rates. The companion trache is so named because it is designed to… …   Investment dictionary

  • planned amortization class tranche — planned amortization class ( PAC) tranche A REMIC security created to receive selected cash flows from a pool of underlying mortgages securing the REMIC. PAC tranches use a structure similar to a sinking fund to establish a fixed principal… …   Financial and business terms

  • busted PAC — Planned amortization class tranches in collateralized mortgage obligations for which the companion or support tranche has been completely retired by larger than expected prepayments from the underlying mortgage loans. Because the companion or… …   Financial and business terms

  • reverse TAC tranche — The opposite of a TAC tranche. Bonds created in scheduled pay CMO structures. A reverse TAC tranche is structured to avoid prepayment volatility. Each TAC has a designated target speed. When prepayments fall below the targeted speed, excess cash… …   Financial and business terms

  • TAC tranche — targeted amortization class (TAC) tranche Bonds created in scheduled pay CMO structures. A TAC tranche is structured to avoid prepayment volatility. Each TAC has a designated target speed. When prepayments exceed the targeted speed, the excess… …   Financial and business terms

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