planned amortization class tranche
- 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 payment schedule. Created together with a companion or support tranche. PAC tranches are intended to have low call and low extension risk.
+ 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 payment schedule. Created together with a companion or support tranche. American Banker Glossary
Financial and business terms.
2012.
Look at other dictionaries:
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
targeted amortization class 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
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 cash flow is diverted to other tranches in… … Financial and business terms
controlled amortization bonds — See planned amortization class tranche; ( PAC tranche) … 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
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
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
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
Collateralized mortgage obligation — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond … Wikipedia
Companion Bond — A class of tranche found in a planned amortization class (PAC) bond that is responsible for protecting the PAC tranche from both contraction and extension risk. The companion bond is designed to absorb excess principal payments during times of… … Investment dictionary
