Collateralized Debt Obligation (CDO) - InvestingAnswers
2020年9月29日 · CDOs are described as structured asset-backed securities because they pay cash flows to investors in a prescribed sequence, based on how much cash flow is collected from the package of assets owned. The CDO is split into different risk classes known as tranches.
Tranche Definition & Example - InvestingAnswers
2020年8月8日 · Asset-backed securities (ABS) are pooled investments, usually consisting of debt instruments such as mortgages or bonds. Banks securitize the individual loans by using their cash flows to create an asset that is then sold to investors on the secondary market. That allows the bank, the original lender, to sell some of the risk of holding the ...
Early Amortization Definition & Example - InvestingAnswers
2019年10月1日 · Most rating agencies require asset-backed securities to include early amortization language as a condition of rating the debt. Though this lowers the risk associated with an asset-backed security, early amortization itself bears risk in that an investor may not earn all the interest promised over the life of the security if an early ...
Collateralized Mortgage Obligation (CMO) - InvestingAnswers
2019年10月1日 · A collateralized mortgage obligation (CMO) is a fixed income security that uses mortgage-backed securities as collateral. Like other structured securities, CMOs are subdivided into graduated risk classes, called tranches that vary in …
Payout Event Definition & Example - InvestingAnswers
2020年11月11日 · Most rating agencies require asset-backed securities to provide payout event language as criteria for rating the debt. Though this lowers the risks associated with asset-backed securities, payout events themselves contain risks in that an investor may not earn all the interest promised over the life of the security if a payout event happens.
Debentures Definition & Example | InvestingAnswers
2020年8月11日 · If Company XYZ is willing to pledge $100 million of its assets to the bondholders (that is, let the bondholders place liens on specific assets that they may seize in the event of default), giving them a little extra assurance that they will be paid on time, then the bonds would be considered securitized or asset-backed.
Early Call Definition & Example - InvestingAnswers
2020年9月29日 · Most rating agencies requier asset-backed securities to disclose early call provisions when they rate the debt. Though this lowers the risks associated with asset-backed securities, early calls contain risks. An investor may not earn all the interest promised over the life of the security if an early call happens.
Troubled Asset Relief Program (TARP) - InvestingAnswers
2020年10月5日 · TARP immediately gave the U.S. Treasury the ability to purchase up to $700 billion to buy mortgage backed securities (MBS) from financial institutions that wanted to sell them. For much of 2008 and 2009, TARP was the only global buyer of these troubled assets .
Money Market Yield Definition & Example - InvestingAnswers
2020年8月21日 · Financial instruments traded on the money market include certificates of deposit, Treasury bills, commercial paper, municipal notes, short-term asset-backed securities, Eurodollar deposits, and repurchase agreements. Because these investments have shorter-terms they are often classified as cash equivalents.
Weighted Average Maturity (WAM) Definition & Example
2020年8月21日 · The WAM can be useful to investors in bond portfolios or in securities that are backed by debt securities, such as mortgage-backed Weighted Average Maturity Calculation with Example The WAM can be calculated by determining the weight of each maturity in the average, multiplying that weight by the security’s maturity, and summing the weighted ...