East Bank securitises a $50 million pool of its business loans. The asset backed securities (ABS)...

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East Bank securitises a $50 million pool of its business loans. The asset backed securities (ABS) issued, as a result, come in 3 tranches of bonds: one $10 million tranche with an AAA rating bought by an insurance company fund, a $25 million tranche with a BB rating bought by a superannuation fund and one tranche $15 million with a CCC rating sold to a managed fund. d) Assume the originator buys all the ABS from the secondary market. Trace the full circulation of the interest generated by the business loans. (2 marks) East Bank securitises a $50 million pool of its business loans. The asset backed securities (ABS) issued, as a result, come in 3 tranches of bonds: one $10 million tranche with an AAA rating bought by an insurance company fund, a $25 million tranche with a BB rating bought by a superannuation fund and one tranche $15 million with a CCC rating sold to a managed fund. d) Assume the originator buys all the ABS from the secondary market. Trace the full circulation of the interest generated by the business loans. (2 marks)