A corporation is considering a securitization and is considering two possible credit enhancement structures backed by a

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A corporation is considering a securitization and is considering two possible credit enhancement structures backed by a pool of automobile loans.

Total principal value underlying the asset-backed security is $300 million.

Principal Value for: Structure I Structure II Pool of automobile loans $304 million $301 million Senior class 250 270 Subordinate class 50 30

a. Which structure would receive a higher credit rating and why?

b. What form of credit enhancement is being used in both structures?

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Bond Markets Analysis And Strategies

ISBN: 9780132743549

8th Edition

Authors: Frank J Fabozzi

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Question Posted: Jul 28, 2024 05:01 AM

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A corporation is considering a securitization and is considering two possible credit enhancement structures backed by a

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Bond Markets Analysis And Strategies

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