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QUESTION 4 Consider a CMBS with the following characteristics: Backed by $20M mortgages, 7% interest, 5-yr maturity, IO annual payments, no servicer fee There are
QUESTION 4 Consider a CMBS with the following characteristics: Backed by $20M mortgages, 7% interest, 5-yr maturity, IO annual payments, no servicer fee There are three tranches issued: $13M Tranche A (Senior/Investment Grade CMBS) with coupon rate 5% $7M Tranche B (Junior/ Non-investment Grade CMBS) with coupon rate 6% IO residual tranche (no extra collateral, but collects extra interest) Assume no defaults. What is the cash flow to Tranche A in year 1? 330,000
QUESTION 5 Consider a CMBS with the following characteristics (Same as Question 4): Backed by $20M mortgages, 7% interest, 5-yr maturity, IO annual payments, no servicer fee There are three tranches issued: $13M Tranche A (Senior/Investment Grade CMBS) with coupon rate 5% $7M Tranche B (Junior/ Non-investment Grade CMBS) with coupon rate 6% IO residual tranche (no extra collateral, but collects extra interest) Assume no defaults. What is the cash flow to Tranche B in year 5?
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Financial Markets And Institutions A Modern Perspective
Authors: Anthony Saunders, Marcia Millon Cornett, Marcia Cornett
2nd Edition
007294109X, 978-0072941098
