Question: How can excess spread be a form of credit enhancement
How can excess spread be a form of credit enhancement?
Answer to relevant QuestionsAnswer the below questions. a. What is the difference between credit tranching and prepayment tranching? b. Why would there be both types of tranching in a nonagency deal but only one type of tranching in an agency deal? The following appears on the web site of Chatham Financial, an advisory service: “Kennett Square, Pa., June 21, 2010 — Chatham Financial announced today that it advised Primus Capital in the defeasance of $76.9 million ...Why is it not adequate to look at the weighted-average debt-to-service coverage ratio and weighted-average loan-to-value ratio for the pool of commercial mortgage loans in assessing the potential performance of a CMBS ...Why do CMBS trade in the market more like corporate bonds than RMBS? What factors do the rating agencies consider in analyzing the structural risk in a securitization?
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