COMPANION TRANCHE
Tranche seen in a planned amortization class (PAC), targeted amortization class (TAC), and collateralized mortgage obligations (CMOs) assuming variable prepayment rates. It is designed to support the principal PAC tranche, which takes the first priority in receiving principal and interest payments to give its investors more stable and predictable cash flows. If the rate of prepayments is different from the assumptions made at the CMO was issued, the companion tranche takes the difference. Also called support tranche.
POPULAR TERMS
Short Leg
Short Leg is a contract where an individual holds a short position. The contract is in the option spread created by the trader by purchasing a put ...
Borrowing Base
Money a lender will loan to a company. The borrowing base is usually determined by a method called margining, where the lender determines a discoun ...
Swaziland Lilangeni
Currency abbreviation for the Swaziland Lilangeni, the official currency of Swaziland. The currency is comprised of 100 cents and presented with th ...
Deposit/Withdrawal At Custodian - DWAC
A method of electronically transferring new shares or paper share certificates from the Depository Trust Company (DTC), which acts as a clearinghou ...
Economic Stimulus
Plans to financially stimulate an economy. It implements monetary or fiscal policy changes to bolster a lagging or struggling economy. Governments ...
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