2 3 8. An ABS deal has a shifting interest structure with a current shifting interest percentage of 60%. Suppose the current senior balance is $525 million and the subordinate balance is $225 million, current schedule principal payments are $5 million and prepayments are $35 million. a) What is the initial subordination level? b) What is the respective share of scheduled principal payments going to the senior and subordinated classes? 3 c) What the respective share of prepayments going to the senior and suborindate classes? 2 d) After receiving the principal cash flows (both scheduled and prepaymenits), what is the updated suborination level? 2 3 8. An ABS deal has a shifting interest structure with a current shifting interest percentage of 60%. Suppose the current senior balance is $525 million and the subordinate balance is $225 million, current schedule principal payments are $5 million and prepayments are $35 million. a) What is the initial subordination level? b) What is the respective share of scheduled principal payments going to the senior and subordinated classes? 3 c) What the respective share of prepayments going to the senior and suborindate classes? 2 d) After receiving the principal cash flows (both scheduled and prepaymenits), what is the updated suborination level