Suppose we created 5 tranches of debt classes from a mortgage securitization. Class A is senior to class B, which is senior to class C, right down to Class E, which is the most junior.

Suppose it was a $100mm issuance and each tranche consisted of $20 mm. The value of the properties at issuance was $120mm. 5 years later, no principal has been repaid but the home value is now $140 mm. Interest is not repaid so the bond goes into default. In the liquidation, the collateral is sold at 50% of its value.

Walk me through the repayment of Class A to Class E.