pass-through

pass-through
The original type of MBS structure. In a pass-through, investors own a pro rata claim to the cash flows from the pool of underlying mortgages. Each investor's pro rata share of interest and principal is remitted to the investor, "passed through," by an agent. American Banker Glossary

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pass-through ˈpass-through noun [countable, uncountable]
1. FINANCE an arrangement where payments on particular home loans are sent by the lender to a financial institution that has sold Mortgage-Backed Securities based on these loans. Mortgage-backed securities are bonds where interest payments on loans are used to pay interest to investors who have bought the bonds, and to repay the bonds when they mature (= reach the time when they must be repaid):

• $200 million of mortgage pass-through certificates (= bonds ) was underwritten by Shearson Lehman Hutton Inc.

2. COMMERCE ECONOMICS the act of increasing prices because costs have increased ; = pass-along AmE:

• the price pass-through for gasoline

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pass-through UK US noun
► [C or U] (also pass-along) COMMERCE an increase in the price a customer pays because of an increase in a company's costs: »

Despite the increased price of raw materials, we want to avoid pass-through or we risk losing customers.

► [C] (also pass-through security) FINANCE an arrangement in which a financial organization buys loans from a bank and sells bonds representing these loans to investors. The payments on the loans are then used to pay interest to the investors and pay back the bonds: »

A trader of 30-year pass-throughs said volume for the day at his firm was about $50 million.


Financial and business terms. 2012.

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  • pass through — phr verb Pass through is used with these nouns as the subject: ↑current, ↑pipe, ↑pipeline, ↑ray, ↑ripple, ↑route, ↑shudder Pass through is used with these nouns as the object: ↑airport, ↑gut, ↑immigration, ↑ …   Collocations dictionary

  • Pass-Through Certificates — (PTCs) are instruments that evidence the ownership of two or more Equipment Trust Certificates. In other words, Equipment Trust Certificates may be bundled into a pass through structure as a means of diversifying the asset pool and/or increasing… …   Wikipedia

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  • pass-through arrangement — England, Wales An arrangement between a contracting local authority and a service provider that is an admitted body to the LGPS. As the LGPS is a defined benefit scheme, the employer s contribution rate will vary depending on the profile of the… …   Law dictionary

  • pass–through security — see security Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

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  • Pass-Through Security — A pool of fixed income securities backed by a package of assets. A servicing intermediary collects the monthly payments from issuers, and, after deducting a fee, remits or passes them through to the holders of the pass through security. Also… …   Investment dictionary

  • Pass-Through Rate — The rate on a securitized asset pool such as a mortgage backed security (MBS) that is passed through to investors once management fees and guarantee fees have been paid to the securitizing corporation. The pass through rate (also known as the… …   Investment dictionary

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